HomeMy WebLinkAboutAgenda Packet 1997/08/05
I; cr.cierè £Imier pel19ity of pertury that I am
_plo'/ed by the CiN of Cllu:a Vista in the
D,'iice 01 ':t,e eit., ClerK "rI" that I pooled
this Aê"n Jo/NoHce on the Bulletin Board at
Tuesday, August 5, 1997 the ,'UiJli1 services Bu:idin ¡ ffiet c~ Hall on Council Chambers
DATED,1 '1/ t:t1 SIGNED 'j t.1 Ii ~ ..
4:00 p.m. Public Services Building
Re.ular Meetin. of the City of Chula Vista City Council
CALL TO ORDER
1. ROLL CALL: Councilmembers Moot -, Padilla -' Rindone -, Salas -, and
Mayor Horton -'
2. PLEDGE OF ALLEGIANCE TO THE FLAG. MOMENT OF SILENCE
3. APPROVAL OF MINUTES: July 15, 1997 and July 22, 1997.
4. SPECIAL ORDERS OF THE DAY:
a. Oath of Oflice:
Charter Review Commission - David L. Potter;
Child Care Commission - Rae Correira;
Desi.n Review Commission - Alfredo Araiza; and
Growth Management Oversi.ht Commission - Manuel R. Aguirre.
b. 1996 "ACES" Award. The Department of Building and Housing for the second consecutive year
is the recipient of the 1996 ACES Award from the California Energy Commission. Presenting
the Award is David A. Rohy, Ph.D., Vice-Chair of the California Energy Commission.
Assemblyman Steve Baldwin will also recognize the Department with a presentation of a State of
California Assembly Resolution as only one of two California cities to receive the ACES Award
for a second consecutive year.
CONSENT CALENDAR
(Items 5 through 19)
The staff recommendations regarding the following items listed under the Consent Calendar will be enacted by
the Council by one motion without discussion unless a Councilmember, a member of the public, or City staff
requests that the item be pulled for discussion. If you wish to speak on one of these items, please fill out a
"Request to Speak Form" avaiÚlble in the lobby and submit it to the City Clerk prior to the meeting. Items pulled
from the Consent Calendar will be discussed after Board and Commission Recommendations and Action Items.
Items pulled by the public will be the first items of business.
5. WRITTEN COMMUNICATIONS:
a. Letter from the City Attorney stating that to the hest of his knowledge from observance of
actions taken in Closed Session on 7/22/97 in wbicb the City Attorney participated, that there
were no reportable actions which are required under the Brown Act to be reported. It is
reconunended that the letter be received and filed.
b. Letter of resignation from the Youth Commission (Hilltop High School) - Michelle Monroy.
It is recommended that the resignation be accepted with regret aod the City Clerk be directed to
post immediately according to the Maddy Act in the Clerk's Oftïce and the Public Library.
Agenda -2- August 5, 1997
c. Letter of resignation from tbe Otay Valley Road Project Area Committee - Jose Doria. It
is recommeoded that the resignatioo be accepted with regret and the City Clerk be directed to post
immediately according to the Maddy Act in the Clerk's Office and the Public Library.
6. ORDINANCE 2710 AMENDING SECTION 19.04.093 THROUGH 095 OF THE MUNICIPAL
CODE TO MODIFY THE DEFINITION OF FAMILY DAY CARE AND
FAMILY DAY CARE HOMES (second readinl! and adoption) - The
proposed project is an ameodment to the Municipal Code to change the
definition of family day care and family day care homes such that they are
consistent with recent changes in California State law. Staff recommends
Council place the ordinance on second reading and adoption. (Director of
Planning)
7. RESOLUTION 18750 AMENDING THE EXISTING AGREEMENT WITH THE COUNTY OF
SAN DIEGO FOR RECEIPT OF FINANCIAL ASSISTANCE IN THE
AMOUNT OF $6,500 TO SUPPORT THE DESIGNATION OF CHULA
VISTA HARBOR AS THE SOUTHERN HOME PORT OF THE TALL
ship CALIFORNIAN - The City's agreement with the Nautical Heritage
Society to designate Chula Vista Harbor as the southern home port of the tall
ship Californian requires that the City make a $27,665 grant in fiscal year
1997/98 to the ship's organization. In consideration of the value of the ship as
a shared community asset, the County has allocated $6,500 io its Community
Enhancement Funds to support his service. Staff recommends approval of the
resolution. (Principal Management Assistant Young)
8. RESOLUTION 18743 ACCEPTING THE CALIFORNIA INTEGRA TED WASTE
MANAGEMENT BOARD USED OIL RECYCLING BLOCK GRANT
#UBG5-96-2055 FOR $274,026 TO CONTINUE USED OIL RECYCLING
AND EDUCATION PROGRAMS FROM JULY 1, 1997 TO JUNE 30, 2000
AND AUTHORIZING THE CITY MANAGER TO EXECUTE ALL
DOCUMENTS IN CONJUNCTION WITH AD MINISTERING THE
GRANT - The California Used Oil Enhancement Act requires the collection of
four manufacturers. Chula Vista consumers pay four cents per quart into the
fund when they purchase oil. The Act mandates the California Integrated Waste
Management Board use a portion of the funds to provide block grants to local
governments for used oil programs that encourage recycling. Staff recommends
approving the resolution. (Conservation Coordinator)
9. RESOLUTION 18744 APPROVING A CONTRACT WITH THE SAN DIEGO CHAMBER
ORCHESTRA, AND APPLYING FOR A TIDELANDS ACTIVITY
PERMIT FROM THE SAN DIEGO UNIFIED PORT DISTRICT FOR THE
1997 SUMMER POPS CONCERT - The City's annual "Summer Pops"
concert is scheduled for Sunday, 8/24/97, at 7:30 p.m., at Marina View Park.
A contract with the San Diego Chamber Orchestra and a Tidelands Activity
Permit from the San Diego Unitied Port District must be approved to proceed
with the production of this event. Staff recommends approval of the resolution.
(Director of Parks, Recreation and Open Space)
Agenda -3- August 5, 1997
10. RESOLUTION 18745 ACCEPTING BIDS AND AWARDING LANDSCAPE MAINTENANCE
CONTRACT FOR OPEN SPACE DISTRICTS 11, 14, 15 AND 24 TO NEW
WAY PROFESSIONAL SERVICES AND RC LANDSCAPE - Bids were
received on 6/10/97 to provide landscape maintenance. Existing contract
expired 6/30/97. Staff recommends this item be continued to the meetinl! of
8/12/97. (Director of Parks, Recreation and Open Space) Continued from the
meetin¡: of 7/22/97.
11. RESOLUTION 18746 APPROVING A DETENTION BASIN AND SILTATION AGREEMENT
WITH VILLAGE DEVELOPMENT L.L.C. TO PROVIDE FOR THE
CONSTRUCTION, MAINTENANCE AND OPERATION OFDETENTION
BASINS AND REMOVAL OF SILT FROM SAID BASINS AND
TELEGRAPH CANYON CHANNEL AND AUTHORIZING THE MAYOR
TO EXECUTE SAID AGREEMENT - On 11/19/96, Council approved
Tentative Map Number 96-04 for a portion of Villages One and Five of Otay
Ranch. The Tentative Map conditions require that, prior to issuance by the City
of a grading permit, the developer shall enter into an agreement with the City
to provide for the construction and maintenance of certain drainage
improvements. The developer is currently processing grading plans with the
City and issuance of the grading permit is anticipated shortly. Staff recommends
approval of the resolution. (Director of Public Works)
12. RESOLUTION 18747 EST ABLISHING DATES FOR PROPERTY OWNERS TO BE READY TO
RECEIVE UNDERGROUND SERVICE AND THE REMOVAL OF POLES
AND OVERHEAD FACILITIES WITHIN UNDERGROUND UTILITY
DISTRICT NUMBER 129 ON OT A Y LAKES ROAD FROM RIDGEBACK
ROAD TO APACHE DRIVE - On 10/22/96, Council established Underground
Utility District Number 129 on Otay Lakes Road from Ridgeback Road to
Apache Drive. In accordance with Section 15.32.150 of the Municipal Code,
Council shall, by resolution, fix the date upon which the affected property
owners must be ready to receive underground service and the date by which
poles, overhead wires and associated structures shall be removed. The
conversion of overhead utilities to underground is scheduled to be completed in
Decemher 1997. Staff recommends approval of the resolution. (Director of
Puhlic Works)
13. RESOLUTION 18748 ADOPTING 1997 STANDARD SPECIFICATIONS FOR PUBLIC WORKS
CONSTRUCTION, "GREENBOOK," REGIONAL SUPPLEMENTS AND
ST ANDARD DRAWINGS, CHULA VISTA STANDARD DRAWINGS AND
STANDARD PROVISIONS, AND THE STATE OF CALIFORNIA,
DEPARTMENT OF TRANSPORTATION STANDARD PLANS -In 1997,
the "Standard Specifications for Public Works Construction," properly known
as the "Greenbook" was revised by established committees representing all facets
of the construction industry and government to reflect changes in technologies
and/or performance tests. The Regional Standards Committee (which includes
Chula Vista) has revised the regional standard drawings and specifications and
have published the revised 1997 edition. Engineering staff has also revised the
City of Chula Vista Standard Special Provisions; City of Chula Vista Part I
Special Provisions-General; and the City of Chula Vista "Department of Public
Works Design Standards - Construction Standards." Staff reconunends approval
of the resolution. (Director of Public Works)
Agenda -4- August 5, 1997
14. RESOLUTION 18749 AUTHORIZING SUBMITTAL OF A REQUEST FOR SOUNDWALL
PROGRAM FUNDING IN THE 1998 STATE TRANSPORTATION
IMPROVEMENTS PROGRAM FOR PLANNED IMPROVEMENTS TO
THE I-805/0RANGE A VENUE INTERCHANGE AND APPROVING THE
THIRD AMENDMENT TO THE AGREEMENT WITH RICK
ENGINEERING COMPANY FOR PREPARATION OF A NOISE
BARRIER SCOPE SUMMARY REPORT FOR THE I-805/0RANGE
A VENUE INTERCHANGE AND AUTHORIZING THE MAYOR TO
EXECUTE SAID AGREEMENT ON BEHALF OF THE CITY - In January
1996, Council approved an agreement with Rick Engineering to prepare
preliminary studies for interchanges at 1-805 and Telegraph Canyoo Road,
Orange Avenue and Palomar Street. A second amendment was approved for
additional work required by Caltrans. In February 1997, Caltrans notified the
City of the anticipated funding opportunities for retrofit Soundwall projects along
local freeways. A third amendment to the agreement is required for work in
connection with the Draft Noise Barrier Scope Summary Report submittal. Staff
recommends approval of the resolution. (Director of Public Works)
15. REPORT CHULA VISTA PUBLIC LIBRARY'S APPLICATION FOR LIBRARY
SERVICES AND TECHNOLOGY ACT (LSTA), VIRTUAL REFERENCE
NETWORK GRANT FUNDS FOR FISCAL VEAR 1997/98 - The Chula
Vista Public Library, in partnership with National City Public Library, has been
specifically invited by the California State Library to apply for Library Services
and Technology Act grant funds to provide equipment, staffing and materials to
create an Internet-based health reference product (The Virtual Reference
Network) directed toward low-literate Hispanic women, ages 18-35. The project
would also allow the Library to provide access to its other databases (such as the
catalog) via the World Wide Web. Staff recommends Council accept the report
and ratify the application for $231,563 in LST A funding for the Virtual
Reference Network project. (Library Director)
ADJOURNMENT TO REGULAR AND/OR JOINT MEETING OF THE REDEVELOPMENT AGENCY
. . . END OF CONSENT CALENDAR' ..
ORAL COMMUNICATIONS
This is an opportunity for the general public to address the City Council on any subject matter within the
Council'sjurisdiction that is not all item 0" this agellda for public discussion. (State law, however, generally
prohibits the City Council from taking action on any issues not included on the posted agenda.) If you wish to
address the Council on such a subject, please complete the "Request to Speak Under Oral Communications
FornI" avaiÚlble in the lobby and submit it to the City Clerk prior to the meeting. Those who wish to speak,
please give your name and address for record purposes and follow up action.
PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES
The following items have been advertised and/or posted as public hearings as required by law. If you wish to
speak to any item, please fill out the "Request to Speak Fonn" available in the lobby and submit it to the City
Clerk prior to the meeting.
Agenda -5- August 5, 1997
16. PUBLIC HEARING PCA 97-05; CONSIDERATION OF AMENDMENT TO SECTIONS
19.22.170 AND 19.64.180 OF THE MUNICIPAL CODE TO ALLOW
BUILDING ADDITIONS ON RESIDENTIAL LOTS CONTAINING AN
EXISTING RESIDENCE TO MAINTAIN EXISTING SIDEYARD
SETBACKS - CITY INITIATED - The proposal is to amend Sections
19.22.170 and 19.64.180 of the Municipal Code to allow building additions to
adhere to the same setback enjoyed by the existing house, but no closer that five
feet to the side property line with a minimum ten foot separation from any
adjacent residence. Staff recommends Council place the ordinance on first
reading. (Director of Planning)
ORDINANCE 2711 AMENDING SECTIONS 19.22.170 AND 19.64.180 OF THE MUNICIPAL
CODE RELATING TO REQUIRED SIDEYARD SETBACKS FOR
ADDITIONS TO EXISTING RESIDENCES (Iirst readinl!)
17. PUBLIC HEARING PCC-97-39; REQUEST FOR A CONDITIONAL USE PERMIT FOR A
FEDERAL GOVERNMENT OFFICE AND WAREHOUSE FACILITY
FOR THE U.S. DEPARTMENT OF IMMIGRATION AND
NATURALIZATION SERVICES AT 2411 BOSWELL ROAD, WITHIN
THE EASTLAKE I PLANNED COMMUNITV - WESTERN DEVCON,
INc. - The request is to construct an oftÏce and warehouse building for the U.S.
Department of hrunigration and Naturalization Services. This building will
serve as a regional facility for administrative, classroom, and warehouse
operations for the INS. Staff recommends approval of the resolution. (Director
of Planning)
RESOLUTION 18751 APPROVING A CONDITIONAL USE PERMIT FOR AN OFFICE AND
WAREHOUSE FACILITY FOR THE U.S. IMMIGRATION AND
NATURALIZATION SERVICES AT 2411 BOSWELL ROAD, WITHIN
THE P-C ZONE
18. PUBLIC HEARING CONSIDERATION OF AN INCREASE IN SEWER SERVICE CHARGES
The City's last sewer service rate increase was passed in July 1992. Annual
expenditures have increased from $8.62 million in fiscal year 1992/93 to an
estimated $14.12 million in fiscal year 1997/98. Expenditures have exceeded
revenues by a total of approximately $4.5 million between tiscal years 1994/95
and 1996/97. In order to continue to meet expenses related to the construction
and operation of the sewage transportation and treatment system, the sewer
service rates must be increased. Staff recommends approval of the resolution.
(Director of Public Works) NOTE: TIME CERTAIN FOR 6:00 P.M.
RESOLUTION 18752 APPROVING AN AMENDMENT TO THE MASTER FEE SCHEDULE
ON SEWER SERVICE CHARGES AND TRANSFER OF $3,739,580 AND
$469,900 FROM FUNDS 222 AND 226, RESPECTIVELY, INTO FUND 225
BOARD AND COMMISSION RECOMMENDATIONS
This is the time the City Council will consider items which have been forwarded to them for consideration by one
of the City's Boards, Commissions, anti/or Committees.
None suhmitted.
Agenda -6- August 5, 1997
ACTION ITEMS
The items listed in this section of the agenda are expected to elicit substantial discussions and deliberations by
the Council, staff, or members of the general public. The items will be considered individually by the Council
and staff recommendations may in certain cases be presented in the alternative. Those who wish to speak, please
fill out a "Request to Speak" form available in the lobby and submit it to the City Clerk prior to the meeting.
19. RESOLUTION 18753 1) ACCEPTING CLAGGETT WOLFE ASSOCIATES (CONSULTANT)
PHASE I FINDINGS AND RECOMMENDATIONS AND AUTHORIZING
STAFF TO PROCEED WITH PHASES II AND III TO DEVELOP A
SMALL BUSINESS REVOLVING LOAN PROGRAM; 2) APPROVING
AN AMENDED AGREEMENT WITH CONSULTANT FOR PHASES II,
III AND A NEW PHASE IV (EDI GRANT APPLICATION) AT AN
ADDITIONAL COST OF $5,700 TO BE PAID FROM REPROGRAMMED
CDBG AND ECONOMIC DEVELOPMENT FUNDS; AND 3)
AUTHORIZING STAFF TO USE SECTION 108 AS A RESOURCE FOR
ECONOMIC DEVELOPMENT PROJECT NEGOTIATIONS, SUBJECT
TO APPROVAL BY COUNCIL OF INDIVIDUAL LOAN
APPLICA nONS. Council approved $30,000 in Community Developmeot
Block Grant funding to hire a consultant to prepare a feasibility analysis of the
HUD 108 Loan/Loan Guarantee Program, and assuming positive results, assist
staff to develop a Chula Vista Business Loan Program. The consultant
agreement is 3-phased: Phase 1 has been completed; Phase II is to assist staff
with the preparation and submission of a Generic HUD Section 108 Loan
application; and Phase III is the development of a Chula Vista Small Business
Revolving Loan Program. Staff recommends approval of the resolution.
(Director of Conununity Development)
20. RESOLUTION 18754 GRANTING EASEMENT TO OWNER OF THE PROPERTY AT 4045
PALM DRIVE FOR REMOTE WATER SERVICE THROUGH CITY
OPEN SPACE AND APPROVING AGREEMENT WITH SAID OWNER
WITH RESPECT TO SAID WATER SERVICES - Paul Chavez, owner of
the vacant property at 4045 Palm Drive, plans to build a single family home on
the parcel. The most practical and economical way of receiving water service
with sufficient pressure is to have a remote service installed through City open
space. In order to have a meter installed, Sweetwater Authority requires the
owner to provide evidence of a grant of easement by the City for the pipeline
from Greenwood Place through two open space lots to the property. Staff
recommends approval of the resolution. (Director of Public Works)
ITEMS PULLED FROM THE CONSENT CALENDAR
This is the time the City Council will discuss items which have been removed from the Consent Calendar.
Agenda items pulled at the request of the public will be considered prior to those pulled by Councilmembers.
Agenda -7- August 5, 1997
OTHER BUSINESS
21. CITY MANAGER'S REPORT(S)
a. Scheduling of meetings.
b. Dates for City Council tour.
22. MAYOR'S REPORT(S)
a. Ratification of appointments:
Board of Apneals & Advisors - Ed Kaya (to till vacancy created by Member Puzon, whose term
expired on June 30, 1997);
Cultural Arts Commission - Matt A. Flach (to fill vacancy created by Commissioner Salgado.
whose term expired on June 30, 1997);
Growth Mana.ement Oversi.ht Commission - Rafael L. Munoz - Eastern Rep (to till vacancy
created by Commissioner Kell, whose term expired on June 30, 1997);
Library Board - Barbara Charett (to fill vacancy created by Member Williams, whose term expired
June 30, 1997); and
Resource Conservation Commission - Charles Bull (to fill vacancy created by Commissioner Hall,
whose term expired on June 30, 1997).
23. COUNCIL COMMENTS
Councilmemher Rindone
a. Request for consideration of a City Council Workshop for presentation by Southern California
Housing on Community Revitalization and Provision of Affordable Housing through Large
Apartment Complex Acquisition, Rehabilitation and Operation.
ADJOURNMENT
The meeting will adjourn to (a closed session and thence to) a special meeting of the City Council on Monday,
August 11, 1997 at 5:30 p.m. in the Council Conference Room, Administration Building, thence to the regular City
Council meeting on August 12, 1997 at 6:00 p.m. in the City Council Chambers.
A special joint meeting of the City Council/Redevelopment Agency/Housing Authority/Industrial Development
Authority/Public Financing Authority will be held immediately following the City Council meeting.
M declare un1er penelty of perjury that I em
em 10 'e1 b'l li]e . i ¡., 0"1 ;;'1018 V';s.ta in the
O,dceol ¡:eGjt"'~.;i"I':::n;t'lat pos¡ed
this Aßn :d!No'¡ce on the Bullet:n Board at
Tuesday, August 5, 1997 the PU'.:JliCtSrV¡ces Bu, ,Jin', an~bjk?f5 Hall on
DATED, g I C}1 SIGNED }1 ilN:]PI7" . Council Chambers
4:00 p.m. Public Services BUlldmg
(immediately following the City Couocil Meeting)
Citv of ChuJa Vista City Council
CLOSED SESSION AGENDA
Effective April], ]994, there have been new amendments to the Brown Act. Unless the City Attorney, the City
Manager or the City Council states otherwise at this time, the Council will discuss and deliberate on the following
items of business which are permitted by ÚlW to be the subject of a closed session discussion, and which the
Council is advised should be discussed in closed session to best protect the interests of the City. The Council is
required by ÚlW to return to open session, issue any reports of J.lM1 action taken in closed session, and the votes
taken. However, due to the typical length of time taken up by closed sessions, the videotaping will be terminated
at this point in order to save costs so that the Council's return from closed session, reports of J.lM1 action taken,
and adjournment will not be videotaped. Nevertheless, the report of final action taken will be recorded in the
minutes which will be available in the City Clerk's Office.
1. CONFERENCE WITH LEGAL COUNSEL REGARDING:
8 Anticipated litigation pursuant to Government Code Section 54956.9(b)(1) - Communication
from George Ronis, Attorney at Law, of August 1, 1997.
2. CONFERENCE WITH LABOR NEGOTIATOR - Pursuant to Government Code Section 54957.6
8 Agency negotiator: John Goss or designee for CVEA, WCE, POA, 1AFF, Executive
Management, Mid-Management, and Unrepresented.
Employee organization: Chula Vista Employees Association (CVEA) and Western Couocil of
Engineers (WCE) , Police Officers Association (POA) and International Association of Fire
Fighters (lAFF).
Unrepresented employee: Executive Management, Mid-Management, and Unrepresented.
2. REPORT OF ACTIONS TAKEN IN CLOSED SESSION
/~e/~
July 31, 1997
TO: The Honorable Mayor and city council
:2~
FROM: John D. Goss, city Manager~
SUBJECT: City Council Meeting of A 'gust 5, 1997
This will transmit the agenda and related materials for the regular
city Council meeting of Tuesday, August 5, 1997. Comments
regarding the written Communications are as follows:
5a. This is a letter from the city Attorney stating that to the
best of his knowledge from observance of actions taken in
Closed session on 7/22/97 in which the City Attorney
participated, there were no reportable actions required under
the Brown Act to be reported.
IT IS RECOMMENDED THAT THIS LETTER BE RECEIVED AND FILED.
5b. IT IS RECOMMENDED THAT MICHELLE MONROY'S RESIGNATION FROM THE
YOUTH COMMISION BE ACCEPTED WITH REGRET AND THE CITY CLERK BE
DIRECTED TO POST IMMEDIATELY ACCORDING TO THE MADDY ACT IN THE
CLERK'S OFFICE AND THE PUBLIC LIBRARY.
JDG:mab
~~ft..
::-'.l-:::
---
-.
CllY Of
CHUlA VISfA
OFFICE OF THE CITY A TIORNEY
Date: July 24, 1997
To: The Honorable Mayor and City Council ~/~
From: John M. Kaheny, City Attorney ~
Re: Report Regarding Actions Taken in Closed session
for the Meeting of 7/22/97
The City Council met in Closed Session to discuss labor
negotiations and U.S.A. v. city of San Diego.
The city Attorney hereby reports to the best of his knowledge from
observance of actions taken in the Closed Session in which the City
Attorney participated, that there were no reportable actions which
are required under the Brown Act to be reported.
JMK: 19k
C:\ltlclossess.no
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276 FOURTH AVENUE' CHULA VISTA' CALIFORNIA 91910 . (619) 691-5037 . FAX (619) 585-5612
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RECEIVED
July Iît 1997
.11.17 P4:5a
To: Youth Commision Members,
~uAnSTA
Having worked on the Youth Commision panel for over . 19 ICE
rewarding. Not only was I given the opportunity to meet interesting people from other
schools in my district but I have also obtained first-hand experience regarding how a
community, even as large as Chula Vista, is affected by our decisions. One such instance
that sticks out in my mind was our yearly voting on different amounts to give to South
Bay departments. Another activity I really enjoyed was the christmas wrapping.
Participating in this event gives one a feeling that they're actually making a difference, no
matter how minute, in a childs happiness. It's these activities as well as others the
Youth Commision has participated in, like the painting of Rice elementary school, that
give you a sense that you're not only working for the community but for the people that
live within it.
Unfortunately I will no longer be in San Diego to participate in all the activities
the Youth Commision panel takes part in, in an effort to improve Chula Vista, but I know
I will take with me the concern for my community that I have gained by working with the
Youth Commision. Thank you to Cathy, Rosemary and officer Pugsley for your interest
and time.
Sincerely,
"/f uld6- ~
CC ~ 1f¡~~RmEN COMMUNICA nONS
. ~ ~8jø/
9 W7?V -
6b
RECEIVED
." J1 30 P3:40
8fY ~F a¡UlA VISTA
Y l K'S OFFICE
July 30, 1997
TO: Beverly Authelet, City Clerk
FROM: Armando Buelna~ssistant to the Mayor and Council
SUBJECT: RESIGNATION FROM THE OTAY VALLEY ROAD PROJECT AREA
COMMITTEE
This is to inform you that Mr. Jose Doria has verbally resigned from the Otay Valley
Road Project Area Committee. Mr. Doria is self-employed and the meeting times
created conflicts with his work. Still, he noted that serving on the Committee had been
an interesting and rewarding experience, and expressed his desire to serve Chula Vista
on another Board, Committee, or Commission. Please place this item on the next
available agenda to allow the City Council to formally accept his resignation.
ab
cc: Fred Kassman, Redevelopment Coordinator
WRITTEN rr:.~.'~.~~:~UN1CA TIONS
sc
~\c~
#~'
ORDINANCE NO. 2710
,~~
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY ~
OF CHULA VISTA AMENDING SECTION 19.04.093 ~
THROUGH 095 OF THE CHULA VISTA MUNI~
CODE TO MODIFY THE DEFINITION OF FAM Y
CARE AND FAMILY DAY CARE HOMES
WHEREAS, the City Council has modified the definition of family day care in
the Municipal Code, and required written notification of the affected property owner or
landlord of use of their property as a family day care home, in accordance with California
law and based on the need for day care for school age children; and,
WHEREAS, a duly verified application for a Municipal Code text amendment
was initiated with the Planning Department of the City of Chula Vista on April I, 1997 by
the City of Chula Vista; and,
WHEREAS, said application requests approval of an amendment to the
Municipal Code to change the the definition of family day care so that it is consistent with
California State law; and,
WHEREAS, the Environmental Review Coordinator has determined that this
proposal is exempt from environmental review under CEQA as a 15061(b)(3) (General Rule)
exemption; and,
WHEREAS, the City Clerk set the time and place for a hearing on said
amendments to the Municipal Code, and notice of said hearing together with its purpose was
givyn by its publication in a newspaper of general circulation in the City at least 10 days
prior to the hearing; and,
WHEREAS, the hearing was held at the time and place as advertised, namely
6 p.m. on July IS, 1997, in the Council Chambers, 276 Fourth Avenue, before the City
Council and the hearing was thereafter closed.
NOW, THEREFORE, the City Council of the City of Chula Vista does hereby
find, determine, and ordain as follows:
SECTION I: That there are no significant environmental impacts because the
project is categorically exempt from CEQA pursuant to section of State CEQA Guidelines.
SECTION II: That the public necessity, convenience, general welfare, and
good zoning practice justify the amendments, and that the amendments are consistent with the
City of Chula Vista General Plan.
SECTION III: That Section 19.04.093 through 095 of the Chula Vista
Municipal Code is amended to read as follows:
INFORMATION PACKET
~-/ SCANNED AT FIRST READING
OF THIS ORDINANCE ON:
C!<!I9GÆN .::ïUL 22. ,997
. "'-------'-___"__00"_""
Section 19.040.093 Family day care.
"Family day care" means regularly provided care, protection and supervision of H ..~..~ or
fewer children in the state-licensed provider's own home, for periods of less than 24 hours
per day, while the parents or guardians are away; provided that the licensee of such family
day care home who rents or leases their home, shall notify the property owner or landlord in
writing that they are operating a family day care home in the rented or leased property.
Section 19.040.094 Family day care home, large.
"Family day care home, large" means a Family day care home. as defined by Section
19.04.093. which provides family day care to '+ ~ to H ..~~ children, inclusive, including
children who reside at the home.
Section 19.040.095 Family day care home, small.
"Family day care home, small" means a Family day care home. as defined by Section
19.04.093 which provides family day care to s* Þiî##! or fewer children, including children
who reside at the home.
Presented by Approved as to form by
Robert A. Leiter, Director of John M. Kaheny, City Attorney
Planning
C.\o,\1904093
t:-2
COUNCIL AGENDA STATEMENT
ITEM 7
MEETING DATE: 08/05/97
ITEM TITLE: Resolution \ ~1~O\uthorizing the Mayor to execute an amendment to an
agreement with the County of San Diego for receipt of financial assistance
in the amount of $6,500 to support the designation of Chula Vista Harl~or as
the Southern Home Port ofthe tall ship Californian.
SUMMITTED BY: Dep.'Y Ci'Y M~g~ ~¡c/
REVIEWED BY: City Manager-..Jq Þ¿jc.-z. ' 4/5 Vote: Yes - No..lili
BACKGROUND:
The City's agreement with the Nautical Heritage Society to designate Chula Vista Harbor as the
Southern Home Port of the tall ship Californian requires that the City make a $27,665 grant in FY
1997/98 to the ship's organization. In consideration of the value of the ship as a shared community
asset, the County has allocated $6,500 in its Community Enhancement Funds to support this service.
RECOMMENDATION:
That Council adopt the resolution authorizing the Mayor to sign the attached amendment to last
year's agreement and accept the $6,500 from the County to support the tall ship "Californian".
BOARDS/COMMISSIONS RECOMMENDATION: Not Applicable
DISCUSSION:
The attached agreement identifies the City of Chula Vista as a contractor charged with continuing
to work toward maintaining Chula Vista Harbor as the Southern Home Port of the tall ship
Californian. This agreement recognizes that the tall ship's visits, open houses and special cruises are
enjoyed by residents throughout San Diego County, as.well as tourists. Under the terms of the City's
agreement with the Nautical Heritage Society, the Californian is home ported in Chura Vista at least
20 days per year, with access for free tours and participation in special events including Harbor Day
and Expo '98. It also provides for participation of Chula Vista elementary school students in on-
board Sea Chest programs, high school students in Sea Cadet cruises and inclusion of Chula Vista
in the maritime activities being planned for the "Gold Rush to Statehood" Sesquicentennial from
1998 to 2000. To help keep the home port status, the County has agreed to pay the city the sum of
$6,500 in FY '97/98.
FISCAL IMP ACT:
The payment of $6,500 from the County will go toward reimbursing the General Fund for the
$27,665 contract awarded this fiscal year for the tall ship Californian. The City's approved FY
1997/98 non-departmental budget included $27,665 to cover this commitment with a notation that
County Community Enhancement Funds had been requested.
Attachment: I) Agreement between the County of San Diego
and the City of Chula Vista
2) County Letter of A ward and Contract Amendment
7--1
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"n",m,', o~ """". ." "I' " ,uln th" ~y 00 b'ou," 0"1,,, 'o~ty by ""on of ony ",' '" ,,~Inlon. 'o~"
",II noT bo ,",po"lbI, no, 00 ','d lIobl, f" ony d_" To "",on" P,"","y """""" upon th, ~'. .I,~" " ""u', 01
ony _I..." ~,d by '~""'" " ony of COW""," _'oym. mn "o",h ,~, _I..." 00 f"nl.','. ,,"to', " "on,'
to '~""'" by 'o~", Th, ."""",, " u" of ony '"" _I..." by ConT,,""" ""Ioy.., ,h.1I 00 to"""" " ...n ""
,~""'" m'pn full ""ponolblll,, f" ond """ ,,"'M"", I""",lfy ond ,m h""'m C~" f,~ ond ."'n,, ony ond
oil ,I.IN ," ony do..,. "',,"O"" ,,"u"in, 1,~ ", ~'. .1"", " ""'" 01 ou,h ...I...n" """, ",h d""go .. " '"
""'or"" p,""",y 0' ,on""",. Ot", tonmm". to~tY, "°1"", """"". E""I..." Intlud". but h noT II..", ".
~",I.". tOPI, " oth" ,"in".
16. ,~"', AO'~" " I, """'oIy """"mod.., ""'" "" thl, ,,"-nT ton"I"", ", ,MI" ""-,, 00""" """"'"
.'" 'o~'y 0'" in no "'" ",¡¡ """"" 00 on"""'" '"y """"",Con, bo~fI", "I ",,",,_na " ,",III"y w..w "'"
,"on " '"..n "p'mly pco"o"'.
Î./3
.~
ROBERT BOOKER. Ed.D. QInunilJ nf ~a:n ~i£gn WILLIAM J. KELLY
CHIEF FINANCIAL OFFICER! ASSISTANT AUOITOR AND CONTROLLER
AUDITOR ANO CONTROLLER AUDITOR AND CONTROLLER
16'91 53,...13 1600 PACIFIC HIGHWAY, SAN DIEGO, CALIFORNIA 92101-2478
July 15, 1997
TO: Community Enhancement Program Award Recipient
FROM: Robert Booker, Ed.D.
Chief Financial Officer/Auditor and Controller
.1 would like to congratulate you again on your 1997-98 Community Enhancement Program award. Enclosed
please find two (2) copies of Exhibit A - Notification of Contract Change, reflecting your Community
Enhancement Program award detennined by the County Board of Supervisors on June 24, 1997. I hope the
enclosed 1997-98 Community Enhancement Program Guidelines and Procedures will answer most of your
questions.
In 1996-97, we initiated a renewable contract for Community Enhancement Program award recipients, in order
to streanùine the contract execution process and expedite the payment process for recipients who had been
funded in the past. The executed contract, of which you received an executed copy .last fisçal year, will be
amended for the 1997-98 fiscal year, in accordance with the Board of Supervisors' 1997-98 award amount and
changes to the scope of service, when you sign and return Exhibit A - Notification of Contract Change within 30
days.
After reviewing the attached 1997-98 Community Enhancement Guidelines and Procedures, please sign both
copies of Exhibit A - Notification of Contract Change. Retain one copy for your files and return the other signed
original within 30 days to:
Ellen M. Fry
San Diego County, County Budget Office, Room 352
1600 Pacific Highway,
San Diego, CA 92101-2478
Upon receipt of your signed Exhibit A, your payment will be processed in accordance with the payment schedule
stated in your Contract and the Guidelines and Procedures. If you have any additional questions, please call
Ellen Fry of my staffat 557-4151.
~
ROBERT BOOKER, Ed.D.
Chief Financial Officer/Auditor and Controller
OCB:EF:db
Enclosures
Î--C{
Contract #: 36351
COMMUNITY ENHANCEMENT PROGRAM
EXHIBIT A
FOR 1997-98
NOTIFICATION OF CONTRACT CHANGE
NAME OF ORGANIZATION: City of ChuJa Vista
DATE OF AWARD BY THE BOARD OF SUPERVISORS: JUNE 24, 1997 (71)
PERIOD OF CONTRACT RENEWAL: JULY 1, 1997 - JUNE 30, 1998
SCOPE OF SERVICE: Tall Ship Californian
-
AWARD AMOUNT: $6,500.00
I agree to the Contract tenns stated above.
Signature Date
NOTE: Pursuant to the Contract, Exhibit A must be returned within 30 days in order to effectuate a renewal
for 1997-98.
"1-Ç"
RESOLUTION NO. f1S-o
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AUTHORIZING THE MAYOR TO EXECUTE
AN AMENDMENT TO AN AGREEMENT WITH THE COUNTY
OF SAN DIEGO FOR RECEIPT OF FINANCIAL
ASSISTANCE IN THE AMOUNT OF $6,500 TO SUPPORT
THE DESIGNATION OF CHULA VISTA HARBOR AS THE
SOUTHERN HOME PORT OF THE TALL SHIP
CALIFORNIAN
WHEREAS, the City's agreement with the Nautical Heritage
society to designate Chula vista Harbor as the Southern Home Port
of the tall ship Californian requires that the City make a $27,665
grant in FY 1997/98 to the ship's organization; and
WHEREAS, in consideration of the value of the ship as a
shared community asset, the County has allocated $6,500 in its
Community Enhancement Funds to support this service; and
WHEREAS, staff recommends continuing the project and
recommends executing an amendment to the agreement with the county
of San Diego.
NOW, THEREFORE, BE IT RESOLVED that the City Council of
the City of Chula vista does approve an Amendment to an Agreement
with the county of San Diego for receipt of financial assistance in
the amount of $6,500 to support the designation of Chula vista
Harbor as the Southern Home Port of the tall ship Californian, a
copy of which is on file in the office of the city Clerk.
BE IT FURTHER RESOLVED that the Mayor of the city of
Chula vista is hereby authorized and directed to execute said
amendment for and on behalf of the City of Chula vista.
Presented by Approved as to form by
George Krempl, Deputy City
Manager
C:lcsltollship.Co
{'~
COUNCIL AGENDA STATEMENT
Item 't
Meeting Date AUflust 5. 1997
ITEM TITLE: Resolution I ~7'+ 3> Accepting the California Integrated Waste
Management Board Used Oil Recycling Block Grant # UBG5-96-2055
for $274,026 to continue Used Oil Recycling and Education Programs
from July 1, 1997 to June 30, 2000, Authorizing the City Manager to
Execute all Documents in Conjunction with Administering the Grant and
Appropriating $94,303 for Fiscal Year 1997/98.
SUBMITTED BY: Coo~,tion cooro;n.~ %
REVIEWED BY: City Manage\J\ ~ ~ 4/5ths Vote: Yes - No.1O
BACKGROUND: The California Used Oil Enhancement Act requires the collection of four
cents for every quart of lubricating oil sold, transferred and imported into California from oil
manufacturers. Chula Vista consumers pay four cents per quart into the fund when they
purchase oil. The Act mandates the California Integrated Waste Management Board
(CIWMB) use a portion of the funds to provide block grants to local governments for used oil
programs that encourage recycling.
The grants fund used oil public education and recycling programs designed to reduce or
eliminate the contamination of the local watershed caused by improper disposal of used oil.
The City has been awarded approximately $635,000 over the past four years to develop and
implement a regional used oil recycling program for the South Bay. This block grant would
provide $94,303 of additional funds to allow the City to continue the primary components of
the existing programs into the 1997/98 fiscal year and at least $89,862 for the 1998/99 and
1999/2000 fiscal years. The funds for the second and third fiscal year may be enhanced
during the grant and the state allows unused funds from the first two fiscal years to be carried
forward to the end of the grant cycle.
RECOMMENDATION: Approve the resolutions, authorizing the acceptance and execution
of the grant as requested by the state and appropriate funds therefore (Attachment A).
BOARD/COMMISSIONS RECOMMENDATION: The Resource Conservation
Commission (RCC) voted unanimously to recommended that City Council approve the
application at their March 10, 1997 meeting.
DISCUSSION:
This grant is a "regional" program that includes the Cities of Chula Vista, Imperial Beach,
National City and Coronado. The program targets a regional problem that effects all the Cities
~--I
Page 2, Item
Meeting Date 5/21/ 96
that share the South Bay coast and contributing watershed. The primary purpose of this block
grant is to provide $274,026 to continue technical assistance and provide new supplies for the
state certified used oil recycling centers (approximately 25) established under the previous
grants for the next three fiscal years. This grant also funds the Chula Vista and Imperial
Beach curbside used oil and oil filter collection program and the state required public
education component which promotes the used oil curbside and drop-off programs for all
participating cities. That public education component will allow the City to continue
advertising, portable displays, point of purchase displays, the used oil hotline, billing inserts
and other promotional activities throughout the South Bay. Grant funds have also been used to
provide oil filter crushers and oil filter collection for at least one automotive related business
in each participating city. No local matching funds are required by the State, however the
City does invest some public education funds from the Recycling Program and the Non-Point
Discharge Elimination Program (NPDES) to fund complimentary activities, including but not
limited to the hotline information and reporting program, printing, print advertising and
residential/business outreach programs. The grant also provides funds for overhead costs such
as appropriate Administration and Finance Department support services.
FISCAL IMPACT: The grant will provide $274,026 to implement used oil recycling
education and promotion through the year 2000. If approved $94,303 will be appropriated for
this year's budget. Council will have an opportunity to consider additional appropriations of
approximately $90,000 per year for 1998/99 and 1999/2000 as part of their respective budget
review processes. There is no additional fiscal impact as a result of the recommended action
to adopt the attached resolution. The program does not require matching funds, however it
does allow the Conservation Coordinator to more effectively compliment other funds
approved by Council for recycling, household hazardous waste and NPDES public education,
collection and prevention programs. The grant provides funds to cover direct and overhead
costs that are required by the program's implementation.
mtm:used oil
a:blkgnt97.acp
Attachments NOT SCANNED
f-à-
Line Item Appropriations
Used Oil Block Grant # UBG5-96-2055 for $274,026
270-2708
Personnel: (5105,5143,5145) 16,000
Overhead: Conservation Coordinator, Finance,
Clerical Support(5291) 8,000
Contracts: Hotline, Service of Centers
Curbside Service: (5298) 33,000
Equipment: (5568) 3,303
Vehicle Maintenance and Gas: (5269) 3,000
Materials and Supplies: (5398) 31,000
Total $94,303
ð~3
RESOLUTION NO. 1~1tf3
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ACCEPTING THE CALIFORNIA
INTEGRATED WASTE MANAGEMENT BOARD USED OIL
RECYCLING BLOCK GRANT #UBG5-96-2055 FOR
$274,026 TO CONTINUE USED OIL RECYCLING AND
EDUCATION PROGRAMS FROM JULY 1, 1997 TO JUNE
30, 2000, AUTHORIZING THE CITY MANAGER TO
EXECUTE ALL DOCUMENTS IN CONJUNCTION WITH
ADMINISTERING THE GRANT AND APPROPRIATING
$94,303 FOR FISCAL YEAR 1997/98
WHEREAS, the California Used oil Recycling Enhancement
Act requires the collection of four cents for every quart of
lubricating oil sold, transferred and imported into California from
oil manufacturers; and
WHEREAS, the Act mandates the California Integrated Waste
Management Board use a portion of the funds to provide block grants
to local governments for used oil programs that encourage
recycling; and
WHEREAS, the grant fund used oil public education and
recycling programs is designed to reduce or eliminate the
contamination of the local watershed caused by improper disposal of
used oil; and
WHEREAS, this block grant will provide $94,303 of
additional funds to allow the City to continue the primary
components of the existing program into the 1997/98 fiscal year and
at least $89,862 for the 1998/99 and 1999/2000 fiscal years.
NOW, THEREFORE, BE IT RESOLVED that the City Council of
the City of Chula Vista accepts the California Integrated Waste
Management Board Used oil Recycling Block Grant #UBG5-96-2055 for
$274,026 to continue Used oil Recycling and Education Programs from
July 1, 1997 to June 30, 2000.
BE IT FURTHER RESOLVED that the City Manager, or his
designee, is hereby authorized and empowered to execute in the name
of the City of Chula Vista all documents in conjunction with
administering the grant.
1
s-;f-c¡
BE IT FURTHER RESOLVED that the sum of $94,303 is hereby
appropriated from the General Fund to Account 270-2708 as follows:
Personnel $16,000
Overhead: Conservation Coordinator,
Finance, Clerical Support 8,000
Contracts: Hotline, Service of Centers 33,000
Equipment 3,303
Materials and Supplies 31.000
$94,303*
*When the grant funds are received, the General Fund is
to be reimbursed.
Presented by Approved as to form by
Michael Meacham, Conservation
Coordinator
C:lrslusedoi1.5
2
8~Ç
COUNCIL AGENDA STATEMENT Item CJ
Meeting Date 08105197
ITEM TITLE: Resolution ) ~1 ~ l approving a contract with the San Diego Chamber
Orchestra, and applying for a Tidelands Activity Permit from the San Diego
Unified Port District for the 1997. ummer Pops Concert.
SUBMITTED BY:
REVIEWED BY: City ManagerJC1 ~. (415ths Vote: YesllNo_)
-.::---c
The City's annual "Summer Pops" concert is s eduled for Sunday, August 24, 1997, at 7:30 p.m.,
at Marina View Park. A contract with the San Diego Chamber Orchestra and a Tidelands Activity
Permit from the San Diego Unified Port District must be approved to proceed with the production
of this event.
RECOMMENDATION: That Council adopt the resolution and authorize the Mayor to sign the
contract with the San Diego Chamber Orchestra, and the Port District's Tidelands Activity Permit.
BOARDSICOMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION:
The City is planning to host the annual "Summer Pops" concert on Sunday evening, August 24,
1997, at 7:30 pm. The San Diego Chamber Orchestra will provide a program of music, "American
Salute," and will perform for approximately 75 minutes on an outdoor stage located at the west end
of Marina View Park.
The Chamber Orchestra will provide the stage, sound backdrop, and all necessary sound and
lighting equipment for the concert. A brief fireworks display is scheduled to accompany the
Orchestra's final musical selection. The contract with the Chamber Orchestra is included as
Attachment A.
Since the event is being conducted on Port District property, the City is required to complete the
District's standard Tidelands Activity Permit, which includes indemnification language (Attachment
B). It should be noted that the Port District Activity permit gives the Port Authority right to a 24-hour
cancellation notice, which, if exercised, would terminate the activity. However, the contract with the
Orchestra provides flexibility in re-scheduling the concert, and no significant fiscal impact would
result if the event did not take place. Cancellation is highly unlikely, although a serious emergency
in the area could result is such a cancellation.
Free Chula Vista Transit shuttle bus service will be provided to and from the concert site via
designated public parking at the "H" Street trolley stations, and public parking will also be available
in vacant Port-owned lots adjacent to the concert site. Traffic and crowd control will be coordinated
and provided by the Police Department, and promotion and advertising for the event is being
handled by the City's Public Information Coordinator. Other logistical support and coordination is
being provided by Parks, Recreation, and Open Space, Fire, and Public Works. The event budget
is included as Attachment c.
9--\
Item:
Meeting Date: 08/05/97
The City has applied for Financial Support from the San Diego Unified Port District in the amount
of $22,500, which is the direct contractual cost of the Chamber Orchestra. The Port Board will not
be making final decisions on funding requests until early August. However the Port has provided
funding and co-sponsorship of this event for a number of years, and there is no indication at this
point that they will not be providing the same level of support this year.
FISCAL IMPACT: The total event budget is $33,620, and is allocated in the City's Non-
Departmental Budget. The San Diego Unified Port District may reimburse the City for $22,500
following the event, if the Port approves the City's request for financial assistance.
Attachments: A - Contract - San Diego Chamber Orchestra
B - Tidelands Activity Permit - San Diego Unified Port District
C - Event Budget Detail NOTSCANNEn
"""o.",""""'c,..,,"o"',,,.'" 2
C;--'ò-
ATTACHMENT A
AGREEMENT BETWEEN THE SAN DIEGO CHAMBER
ORCHESTRA AND THE CITY OF CHULA VISTA
THIS AGREEMENT between the San Diego Chamber Orchestra, a not-for-profit corporation incorporated under
the laws of the State of California (herein called the "Orchestra"), and City of Chula Vista (herein called the
"Presenter").
WITNESSETH:
I. ENGAGEMENT. In consideration of the mtttttal promises herein set forth, the Orchestra agrees to
furnish and the Presenter agrees to hire the services of the San Diego Chamber Orchestra for one
concert to be given on Sunday, August 24, 1997, 7:30 p.m. at Marina View Park, 800 Marina
Parkway, Chula Vista, California.
Except as otherwise specifically agreed to in writing, the selection of the program, "American Salute",
any soloist, and other artistic personnel for the concert shall be at the discretion of the Orchestra, and
the mere consent of the Orchestra to furnish particular music or other matter of persons (including the
conductor) shall not be deemed a waiver or relinquishment of this power.
2. PAYMENT. The Presenter shall pay to the Orchestra the amottnt of Twenty Two Thottsand Five
Hundred dollars ($ 22,500.00).
Orchestra shall separately invoice Presenter for payment of contract fees no less than ten (10) days prior
to date of perfonnance.
Payment for the concert shall be in lawful money of the United States on the day of the concert,
immediately following completion of the agreed-upon perfonnance. On failure to pay, the total amount
for the concert shall then become due and owing.
3. The ORCHESTRA shall provide:
a. One (1) musical perfonnance entitled "American Salute" of approximately 75 minutes duration,
without intennission.
b. Orchestra Conductor and appropriate musicians
c. All eqttipment, supplies, and professional labor to successfully produce an outdoor concert,
including but not limited to:
I. stage platfonn, backdrop, and canopy/acoustical shell
2. music stands and seating for the Orchestra
3. overhead and stage lighting for the Orchestra
4. sound system adequate for an outdoor venue with seating for 7,000
5. production crew to set-up, operate, monitor, and remove Orchestra equipment
6. piano(s) as reqttired by program selection
d. Liaison with selected fireworks vendor to coordinate fireworks finale
-" 1
G\,3
4. The PRESENTER shall provide:
a. Four (4) portable restrooms, with sinks, for the exclusive use of Orchestra personnel
b. Access to Marina View Park throughout the day and evening, and a smooth and level grass area
approximately 150' x 70' for the Orchestra stage and shell.
c. Backstage security consisting of two (2) personnel beginning one hour prior to scheduled
concert time and ending one hottr after the conclusion of the performance.
d. Reserved parking areas for Orchestra musicians and personnel, and shuttle bus service between
parking areas and concert site.
e. Adequate electrical power with point of connection within 100 feet of concert site.
f. Fireworks display to accompany final musical selection.
g. Concert venue with adequate parking, security, restrooms, and shuttle bus service for the general
public.
h. Programs, publicity and promotions, and any required permits.
5. CREDITS, PROGRAM AND PUBLICITY. The Presenter agrees to display the name of the Orchestra,
Orchestra logo, the conductor, and soloists (if applicable) in the printed program, and to print and
distribute house programs that include information furnished by the Orchestra. Proof of printed
programs shall be furnished the Orchestra for review prior to printing and distribution. The Presenter
agrees to promote the concerts and to attempt to obtain an attendance in a number that the facility at
which the performance will be held will reasonably accommodate.
6. RESTRICTION. The Presenter agrees that the concert or any portion thereof is not to be recorded,
broadcast, or televised without the prior written consent of the Orchestra.
In the event that the Orchestra wishes to have the concert recorded, broadcast, or televised, the Presenter
agrees to make the facility available for the installation, operation and removal of all necessary
eqttipment and facilities. All costs relative thereto shall be borne by the Orchestra. The Presenter shall
not receive any fee, remuneration or compensation for any such recording or broadcast.
7. NO DISCRIMINATION. The Presenter agrees that admission to and seating at the concert venue shall
be without regard to race, color, religion or national origin.
8. PROGRAM CHANGES. The Orchestra shall have the right, exercisable solely at its discretion, to
change the program of the concert at any time and for any reason, regardless of any advertisement,
consent or promise of the Orchestra, whether contained in Paragraph One hereof or otherwise, by
removing ÍÌ'om the program any music and substituting therefor other music of a similar style to
maintain the publicized programmatic theme. The Orchestra shall also have the right, exercisable solely
at its discretion in the case of unforeseen emergency, to remove any person, including the Conductor
or soloist, except the San Diego Chamber Orchestra itself, and either substituting therefor other person
or persons, or none at all. The Orchestra's performance of the program as so changed shall be deemed
full performance of its engagement and obligations, whether under Paragraph One hereof or otherwise,
for the concert which would have otherwise been performed.
-" 2
q-'f
9. IMPOSSIBILITY OF PERFORMANCE. If the concert which is the subject matter of this agreement
is prevented !Tom occurring for any reason which is beyond the control of either of the parties such as
an act of God, fire, illness or physical disability of performers, acts or regulations of public authorities
or labor unions, labor difficulties, lock-out, strike, civil tumult, war, riot, power failure, air raid, or air
raid alarm, act of a public enemy, interruption or delay of transportation service for musicians,
epidemic, ("Intervening Force"), the duties of the parties herein specified including the duty of Orchestra
to perform and the duty of Presenter to pay shall be suspended, each party to bear their own costs
incurred in the preparation of the concert to the time of the Intervening Force. Both of the parties shall
agree to meet and confer for the purpose of rescheduling the performance or performances herein
specified, and all reasonable effort will be made to reschedule the performance and to perform as herein
specified.
10. EXCUSE FROM PERFORMANCE. The Orchestra is not required to perform the concert as herein
specified if the area, material and facilities as herein specified to be provided by Presenter have not
been substantially provided.
11. NOTICE. Any notice which is provided to be given under the terms of this agreement must be in
writing and may be given personally or by registered mail, directed to the San Diego Chamber
Orchestra at P.O. Box 3333, Rancho Santa Fe, California 92067, and to the City at 276 Fourth Avenue,
Chula Vista, California 91910. Either party may, by like notice, designate a different address for the
serving of notices.
12. MODIFICATION. No modification or waiver of any of the terms of this Agreement shall be valid
unless in writing and executed with the same formality as this Agreement. Failure of either party to
insist in anyone or more instances upon strict performance of any of the terms and provisions on the
other party's part to be performed, shall not be considered as a waiver or relinqttishment of any such
term or provision for the future, and the same shall continue in full force and effect.
13. HOLD HARMLESS/INSURANCE
HOLD HARMLESS: Orchestra agrees to indemnify and hold harmless the City of Chula Vista and the
San Diego Unified Port District against and !Tom any and all damages to property or injuries to or death
of any person or persons, including property and employees or agents of the City and/or the Port
District, from any and all claims, demands, suits, actions or proceedings of any kind or nature inclttding
worker's compensation claims, of or by anyone whomsoever, in any way resulting from or arising out
of the negligent or intentional acts, errors or omissions of the Orchestra or any of its officers, agents
or employees.
Presenter agrees to indemnify and hold harmless the Orchestra against and !Tom any and all damages
to property or injuries to or death of any person or persons, including property and employees or agents
of the Orchestra, !Tom any and all claims, demands, suits, actions or proceedings of any kind or nature
including worker's compensation claims, of or by anyone whomsoever, in any way resulting !Tom or
arising out of the negligent or intentional acts, errors or omissions of the Presenter or any of its officers,
agents or employees.
INSURANCE: Orchestra shall, throughout the duration of this Agreement maintain comprehensive
general liability and property damage insurance covering all operations hereunder of Orchestra, its
agents and employees including bttt not limited to premises and automobile, with minimum coverage
of One Million dollars ($1,000,000.00) combined single limits. Evidence of such coverage, in the form
of a Certificate of Insurance and Policy Endorsement shall be submitted to the City's Risk Manager at
276 Fourth Avenue, Chula Vista, CA 91910, and to the Port District's Community Relations
Department at P.O. Box 488, San Diego, CA 92112. Said policy or policies shall provide thirty (30)
---" 3
c¡-~
day written notice to the City's Risk Manager and the District's Communities Relations Department of
cancellation or material change. Insurance Certificate shall not include "Modified Occurrence"
restrictions. Insurance carrier shall have a Best's Rating of "A-" or better.
14. ASSIGNMENT. Each of the parties to this agreement are required to perform personal services to the
other party. Therefore, this agreement shall not be assigned by either party to any other person, firm,
association, organization, or entity without the prior written consent of the other party, which written
consent may be withheld for any purpose whatsoever in the sole discretion of the party whose consent
is required.
IS. CONSTRUCTION. This Agreement shall be construed, governed, and interpreted pursuant to the laws
of the State of California, and is a California Contract. This Agreement represents the full
understanding between the parties, and neither party shall be bound by any terms or undertakings other
than those contained therein.
IN WITNESS WHEREOF THE PARTIES HAVE EXECUTED TillS AGREEMENT THE DAY AND YEAR
BELOW WRITTEN.
PRESENTER'S NAME: THE SAN DIEGO CHAMBER ORCHESTRA
CITY OF CHULA VISTA
BY: BY:
TITLE TITLE
DATED: 19 - DATED: 19-
-" 4
9-~
ATTACHMENT B
SAN DIEGO UNIFIED PORT DISTRICT
TIDELAND ACTIVITY PERMIT
PERMITTEE: City of Chula Vista
USE OR ACTIVITY: Summer Pops Concert
LOCATION FOR WHICH PERMIT ISSUED: Marina View Park &ad.iacent vacant lots
EFFECTIVE DATES: Sunday, August 24, 1997
SECURITY DEPOSIT: N/A
THIS PERMIT FOR TIDELAND USE IS ISSUED SUBJECT TO THE FOLLOWING
TERMS AND CONDITIONS:
1. Permittee shall comply with all applicable laws, rules and regulations of
the District and other governmental entities.
2. Permittee shall keep the property and all equipment used in connection
with this permit In a clean, safe and sanitary manner and in good repair at all
times. All or any portion of the security deposit shall be available
unconditionally to the District for the purpose of cleaning or repairing
damages to the property upon termination of this permit.
3. This permit may be cancelled by either party by the giving of twenty-four
(24) hours notice in writing to the other party. Such cancellation shall be
without liability of any nature.
4. This permit shall not be transferred or assigned.
5. Permittee shall defend, indemnify, and hold harmless District, Its officers
and employees against all causes of action, for judicial relief of any kind, for
damage to property of any kind whatsoever, and to whomever tfelonging,
including Permittee, or Injury to or death of any person or persons, including
employees of Permittee, resulting directly or indirectly from activities in
connection with the Issuance and performance of this permit or arising from
the use of the property, facilities or services of District, its officers or
employees.
q~7
6. Permittee shall maintain comprehensive public liability (covering
operations, products and completed operations) and blanket contractual
coverage insurance throughout the term of this permit. The policies shall, as
a minimum, provide the fQllowing forms of coverage: -
One million combined single limit
(A) JlWsalMI Ja¥t IlftXlIUI( IIWIR¥ ~
QUlCeeœcm $
OlWCœiWMAW $
(B) Rm :II~naJW(.»X $
Certificates of such insurance, in a form satisfactory to the District, shall be
filed with District's Community Relations Department. Insurance certificates
filed pursuant to this permit shall contain a non-cancellation-without-notice
clause and shall provide that copies of cancellation notices shall be sent .to
the District.
7. The rights and privileges extended by this permit are non-exclusive.
8. Permittee shall not engage in any activity on property of the District other
than the activity for which this permit is expressly Issued.
9. Permittee shall be subject to and comply with any special conditions
attached hereto.
10. Permittee shall comply with all requirements and directives of the Port
Director of District.
11. In the event of failure of Permittee to comply with any provision of this
permit, this permit may, at the discretion of the Port Director, be terminated
immediately.
SAN DIEGO UNIFIED PORT DISTRICT
Approved:
Permittee hereby accepts this permit and agrees to comply with all the terms and
conditions thereot.
Permittee's signature
Address: 276 FOURTH AVE
CHULA VISTA CA 91910
Telephone: 585-5617
(2)
<1- ~
CHECKLIST FOR THE USE OF TIDELAND PROPERTY Da!e request received
in CR Dept.:-
Please complete each item below.
1. Sponsoring individual or group:
CITY OF CHULA VISTA
2. Address and telephone number of contact person:
JOHN GATES
CITY OF CHULA VISTA
DEPARTMENT OF PARKS, RECREATION & OPEN SPACE
276 FOURT AVE
CHULA VISTA CA 91910 585-5617
3. What type of event is planned?
OUTDOOR CONCERT FEATURING SAN DIEGO CHAMBER ORCHESTRA
4. Where exactly on the bayfront?
WEST SECTION OF MARINA VIEW PARK
5. Day and date of event:
SUNDAY, AUGUST 24, 1997
6. Time: Start 8:00 AM Finish 11:00 PM
7. Will traffic be affected?
INCREASED VOLUME
8. How many persons expected to attend?
4,000 - 6,000
9. If large group, what security arrangements have been made?
CHU~ VISTA POLICE WILL PROVIDE CROWD AND TRAFFIC CONTROL
10. If commercial or catered event, do you have liability insurance coverage?
N/A
Please return this checklist (within 10 working days) or your request lor an event on Port tidelands will be
canceled.
4/93
q-1
ATTACHMENT "C"
BUDGET DETAIL - 1997 SUMMER POPS CONCERT
San Diego Chamber Orchestra - Contractual Costs $ 22,500
Generator Rental 650
Promotions 3,000
Portable Toilets - Rental 400
Shuttle Bus Service - Chula Vista Transit 400
Traffic Safety Equipment - Rental 150
Misc. Equipment 50
Police Services 1,500
Electrician Services 320
Parks & Recreation Staff Services 1,600
Public Works Staff Services 550
Fireworks 2,500
TOTAL $ 33,620
q-ID
RESOLUTION NO. \ ~1c1 l'
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING A CONTRACT WITH THE SAN
DIEGO CHAMBER ORCHESTRA AND APPLYING FOR A
TIDELANDS ACTIVITY PERMIT FROM THE SAN DIEGO
UNIFIED PORT DISTRICT FOR THE 1997 SUMMER POPS
CONCERT, AND AUTHORIZING THE MAYOR TO EXECUTE
SAME
WHEREAS, the City is planning to host the annual "Summer
Pops" concert on August 24, 1997 at 7:30 p.m. at Marina View Park;
and
WHEREAS, a contract with the San Diego Chamber Orchestra
and a Tidelands Activity from the San Diego Unified Port District
must be approved to proceed with the production of this event; and
WHEREAS, staff recommends that Council adopt the
resolution authorizing the Mayor to execute a contract and permits
with the San Diego Chamber Orchestra, and San Diego Unified Port
District.
NOW, THEREFORE, BE IT RESOLVED that the city Council of
the City of Chula vista does hereby approve a contract with the San
Diego Chamber Orchestra for the 1997 summer pops concert at Marina
View Park on Sunday, August 24, 1997, a copy of which is on file in
the office of the City Clerk as Document No.----
BE IT FURTHER RESOLVED that the City Council approves a
Tidelands Activity Permit from the San Diego Unified Port District,
which includes indemnification of the Port District, on file in the
office of the City Clerk as Document No.-----.
BE IT FURTHER RESOLVED that the city Council does hereby
authorize the Mayor to execute said contract and permit.
Presented by Approved as to form by
Jess Valenzuela, Director of
Parks and Recreation
C:\rs\sy.phony
1'1 'I-I!
COUNCIL AGENDA STATEMENT Item ~
Meeting Date 08/05/97
ITEM TITLE: Resolution I f7'-f.,( Accepting bids and awarding landscape maintenance
contracts for Open Space Districts 11, 14, 15 and 24 to New Way Professional
Services and RC Landscape ~
SUBMITTED BY: Director of Parks, Recreation ~ Open Spac ,
REVIEWED BY: City Manage\.JCi Þvó ð-:;z (4/5ths Vote: Yes - No X)
Request for bids to provide landscape maintenance services for Open Space Districts 3,4, and 8, 11, 14,
15 and 24 were let on May 28,1997. These districts went out to bid because their existing contracts had
come to term and expired June 30, 1997.
This item was carried over from the Council meeting of June 24, 1997 for further bid analysis. In the
interim, landscape maintenance has been performed in these districts via a one month extension of the
existing FY 96-97 contracts.
STAFF RECOMMENDATION: Staff recommends this item be continued to the meeting of August 12,
1997. The affected contractors have been notified of the re-scheduled meeting date.
[H:\HOMElPARKSREC\A113\OSltt41'.8-')
/ 0 ~ I
COUNCIL AGENDA STATEMENT
ltemJ..L
Meeting Date...BLSL21..
ITEM TITLE: Resolution 1~7yj.,Approving a Detention Basin and Siltation agreement
between the City and Village Development LLC. to provide for the
construction, maintenance and operation of detention basins and removal
of silt from said basins and Telegraph Canyon Channel and authorizing the
Mayor to execute said agreement.
SUBMITTED BY: 0;="" of "'hlie ,w~
REVIEWED BY: City Manager~ (4/5ths Vote: Yes_No..xJ
On November 19, 1996 by Resolution No. 18398, the City approved Tentative Map No. 96-04
for a portion of Villages One and Five of Otay Ranch. The Tentative Map conditions require that,
prior to issuance by the City of a grading permit, the developer shall enter into agreement with
the City to provide for the construction and maintenance of certain drainage improvements. The
developer is currently processing grading plans with the City and issuance of the grading permit
is anticipated shortly.
RECOMMENDATION: That Council approve the agreement and authorize the Mayor to sign
said agreement.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION: Currently, Village Development is processing mass grading plans with the City
for a portion of Village One which drains to Telegraph Canyon Channel. Approval of these
grading plans and issuance of the corresponding grading permit are anticipated shortly.
Tentative M¡¡p condition # 54 requires the developer to guarantee the construction, operation and
maintenance of certain new drainage facilities in Telegraph Canyon Channel prior to the issuance
of the grading permit. This condition requires that the developer enter into an agreement with the
City to accomplish the following:
1. Guarantee the construction of a permanent drainage runoff detention facility in Telegraph
Canyon Channel. The purpose of this facility is to reduce the 1O0-year frequency peak
flow from the development to an amount equal to or less than the present flow.
/{ - I
Page 2, Item-
Meeting Date 8/5/97
2. Provide for the maintenance of the proposed permanent detention basin in Telegraph
Canyon by the developer until such time as maintenance of such facilities is assumed by
the City or an open space district.
3. Provide for the removal of siltation in the proposed permanent detention basin by the
developer until all upstream grading within the development is completed and erosion
protection planting is adequately established as determined by the City Engineer and the
Director of Parks and Recreation.
4. Provide for the removal of any siltation by the developer in the proposed permanent
detention basin, attributable to the development, for a minimum period of five years after
maintenance ofthe facility is assumed by the City or an open space district.
In satisfaction of Condition # 54, the developer agrees to construct the permanent detention basin
in Telegraph Canyon Channel within a period of three years following Council approval of the
proposed agreement. The developer is required to submit, prior to the issuance of any grading
permit, a bond in the amount of $500,000 to guarantee the construction of said permanent detention
basin. This bond amount is 200% of the estimated cost of construction of the detention basin since
improvement plans have not been submitted to the City.
The developer is also proposing the construction of a temporary detention facility which would
provide the necessary drainage mitigation until the permanent detention facility is constructed
(within three years from the approval of this agreement). This temporary facility will be constructed
on private property (outside of Telegraph Canyon Channel) and will be privately maintained. In
compliance with condition #54, the developer has already provided a cash deposit in the amount of
$35,000 to guarantee the operation and maintenance of said temporary facility for a period of three
years to the satisfaction of the City Engineer, in the event the developer fails to perform. The deposit
amount is based on sedimentation rates and costs experienced with similar projects. In addition, the
proposed agreement stipulates that the City may withhold building permits for the project if the
developer does not maintain the temporary detention basin to the satisfaction of the City Engineer.
Tentative Map Condition # 55 requires that, prior to the issuance of a grading permit, the developer
shall provide for the removal of any siltation, attributable to the development, in the existinl!
"naturalized" Telegraph Canyon Channel extending from Paseo Ladera to the eastern boundary of
Otay Ranch SPA One. Condition # 55 requires the developer to enter into an agreement with the City
whereby the developer agrees to the following:
1. Provide for the removal of siltation from the channel until all upstream grading within the
development is completed and erosion protection planting is adequately established as
determined by the City Engineer and Director of Parks and Recreation.
/1- ;}-
Page 3, Item-
Meeting Date~
2. Provide for the removal of any siltation from the channel attributable to the development for
a minimum time period of five years after maintenance of the channel is assumed by the City
or an open space district.
In compliance with the requirements of Conditions # 54 and 55 regarding the "removal of siltation"
from Telegraph Canyon Channel, the developer is required to submit, prior to the issuance of any
grading permit, a bond in the amount of $180,000 to guarantee the removal of siltation from that
portion of the Telegraph Canyon Channel extending from Paseo Ladera to the eastern Otay Ranch
SPA One boundary (including the proposed permanent detention basin). In addition, a cash deposit
of $50,000 will be required. This deposit may be used to pay for the cost of any removal of siltation
until the City can collect on the bond in case of default by the developer.
The City is currently processing mass grading plans for a portion of Village One which should be
ready for approval shortly. The grading permit will be ready for issuance after approval of the
grading plans, posting of grading bonds and Council approval of the proposed "detention basin and
siltation" agreement. The agreement has been executed by the developer and approved as to form
by the City Attorney.
A plat is available for Council viewing.
FISCAL IMPACT: None. All costs associated with the construction of the proposed drainage
facilities in the Telegraph Canyon Channel will be paid for by the developer. The developer will be
also responsible for maintaining the proposed improvements until said maintenance is assumed by
a maintenance district approved by the City.
Exhibit A - Plat showing area covered by mass grading plans and temporary detention basin. NOT SCANNEl>
Attachment I - Detention Basin and Siltation Agreement
h,lhornele"gi"ee<lage"dalagreepg5.gv
File, 0710-46-PO557
11--3
09-1997 09:09 HUNSAKER & ASSOCIATES 6195581414 P.02/02
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Recording Requested by: )
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CITY CLERK )
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When Recorded, Mail to: )
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CITY OF CHULA VISTA )
276 Fourth Avenue )
Chula Vista, CA 91910 )
)
------------------------------------------------------------------
DETENTION BASIN AND SILTATION AGREEMENT
This Agreement is made by and between Otay Ranch, L.P., a
California limited partnership, referred to herein as
("Developer"), and the City of Chula Vista, a California municipal
corporation ("city"), with reference to the following facts:
RECITALS
A. Developer owns approximately 819.6 acres ("Project") of
that certain real property, as more particularly described in
Exhibit "A" (Legal Description) and as shown on Exhibit "A-1",
located within a portion of what is commonly known as Villages One
and Five of the Otay Ranch planned community.
B. On October 28, 1993, the Chula Vista City Council,
pursuant to Resolution No. 17298, and in accordance with the
California Environmental Quality Act ("CEQA") (Pub. Resources Code
section 21000 et seq.), certified the Final Program Environmental
Impact Report for the GDP, SCH #9010154 ("Program EIR 90-01" or
"Program EIR") , made certain Findings of Fact, adopted a Mitigation
Monitoring and Reporting Program, and adopted a Statement of
Overriding Considerations.
C. On June 4, 1996, the city approved the Otay Ranch
sectional Planning Area Plan, including the Otay Ranch Public
Facilities Financing Plan for Villages One and Five by Resolution
Number 18304, relying on the Otay Ranch SPA One Plan Final Second
Tier Environmental Impact Report 95-01 and the first Addendum.
//-¡It - '"
D. On November 19, 1996, the city approved a Tentative Map,
Tract 96-04, for a portion of Villages One and Five by Resolution
Number 18398-2 and recertifying ErR 95-01. On March 25, 1997, the
City Council, pursuant to Resolution 18613, approved the second
portion of the Otay Ranch SPA One Tract 96-04. (Herein referred to
as the "Project's Tentative Map")
E. Condition number 54 of the Project's Tentative Map, as
more particularly set forth on Exhibit "B", requires the Developer
to guarantee the construction of a drainage facility and guarantee
the operation and maintenance of any temporary runoff detention
basin that may be approved by the City Engineer.
F. Condition Number 55 of the Project's Tentative Map, as
more particularly set forth on Exhibit "B", requires the Developer
to provide for the removal of siltation from the existing
naturalized Telegraph Canyon Channel and the Detention Basin; and
G. Whereas, the City Engineer had determined that a temporary
runoff detention basin, as described in Condition number 54 of the
Project's Tentative Map, and as shown on Chula vista Drawings No.
97-422 thru 97-431 is sufficient as of the date of this Agreement
to temporarily service Phase 2b of the Otay Ranch SPA One Project.
NOW THEREFORE BE IT RESOLVED that the Parties agree as
follows:
1. Defined Terms. As used herein, the following terms shall mean:
1.1 "Complete Construction" shall mean that construction of
the improvements have been completed and have been inspected and
accepted by the City.
1.2 "Maintain" or "Maintenance" shall mean to furnish, or the
furnishing of, services and materials for the ordinary and usual
maintenance required for the operation of any detention basin or
similar type of improvement or as set forth in a City approved
maintenance program.
1.3 "Maintenance District" shall mean a special district
established by the City pursuant to State law.
2. Condition No. 54 - Drainage Facility. Developer understands
and agrees that Developer shall be required to comply with the
provisions of Condition 54 with the first final "B" map or grading
permi t for that land draining into Poggi Canyon. However, in
partial satisfaction of Condition No. 54 of the Project's Tentative
Map, with respect to land draining into Telegraph Canyon Channel,
the Developer agrees to the following:
2.a. Improvement Work. Developer agrees to construct, at its
sole expense, a runoff detention basin in the Telegraph Canyon
2
Ii -l,cJ
Channel, as approved by the city Engineer (herein referred to as
"Detention Basin") to service the Project. Developer shall
construct the Detention Basin in strict conformity and in
accordance with the plans and specifications, approved by the City
Engineer. Developer shall construct the Detention Basin at the
location identified as Alternative 1 or Alternative 2 on Exhibit A-
1 as directed by the City Engineer or at another site determined in
the sole discretion of the City Engineer. Developer understands
and agrees that Developer is responsible for obtaining all
necessary permits, approvals and certifications, if any, from the
applicable federal and/or state agencies, including but not limited
to the California Department of Fish and Game and/or the U.S. Army
Corps of Engineers and the Federal Emergency Management
Administration. Developer shall complete construction of the
Detention Basin on or before the third anniversary date of the City
Council's approval of this Agreement. It is expressly understood
and agreed to by Developer that, in the performance of construction
of said Detention Basin, Developer shall conform to and abide by
all of the provisions of the ordinances, standards and policies of
the city of Chula vista, the laws of the State of California and
federal law as applicable to said work.
2.b. Bondinq.
i. Prior to the city's issuance of the first grading
permit for the Project, Developer agrees to furnish and deliver to
the City of Chula Vista, and to thereafter maintain until City's
acceptance of the Detention Basin, improvement securities from a
sufficient surety, whose sufficiency has been approved by the city,
in the sums set forth on Exhibit "C", to guarantee the faithful
performance in connection with the installation of the Detention
Basin, and to secure the payment of material and labor in
connection with such installation. Developer understands and
agrees that the city shall not issue any grading permits until the
bonds have been delivered and approved as sufficient by the City.
ii. Developer acknowledges and agrees that if the
Detention Basin is not completed within the time agreed herein, the
sums provided by said improvement securities may be used by City
for the completion of the Detention Basin in accordance with those
plans and specifications approved by the City Engineer, or at the
option of the City, for such improvements that are less than, but
not greater to, the sums provided by said improvement securities.
Upon certification of completion by the City Engineer and accep-
tance of said work by the City, and after certification by the
Director of Public Works that all costs hereof are fully paid, the
whole amount, or any part thereof not required for payment thereof,
may be released to the Developer or its successors in interest,
pursuant to the terms of the improvement secur i ty. Developer
agrees to pay to the City any difference between the total costs
incurred to perform the work, including but not limited to
reasonable design and administration of construction in substantial
3
II~Î
conformance with the approved plans (including a reasonable
allocation of overhead), and any proceeds from the improvement
security.
2 .c. Developer's Costs and Expenses. It is also expressly
agreed and understood by the parties hereto that in no case will
the City of Chula Vista, or any department, board or officer
thereof, be liable for any portion of the costs and expenses of the
work aforesaid, nor shall the City or the City's officer, sureties
or bondsmen, be liable for the payment of any sum or sums for said
work or any materials furnished therefor.
2. d. Guarantee Construction. Developer understands and agrees
that until such time as the Detention Basin is fully completed and
accepted by the City, Developer shall be responsible for the care
and any damage to said improvement. It is further understood and
agreed that Developer shall guarantee the Detention Basin for a
period of one year from the date of its final acceptance by the
City and correct within said period any and all defects and/or
deficiencies arising during this period as a result of the acts or
omission of Developer, its agents or employees in the performance
of this Agreement. Upon acceptance of the work by the city,
Developer shall grant to City, by appropriate conveyance, the
Detention Basin constructed pursuant to this agreement; provided,
however, that said acceptance shall not constitute a waiver of
defects by the city as set forth hereinabove. Prior to acceptance
of the Detention Basin, Developer shall provide the city with an
improvement security, from a sufficient surety, approved by the
City, in the amount set forth in Exhibit "c", to guarantee the
Detention Basin from all defects and/or deficiencies for this one
year period. Developer acknowledges and agrees that if any
defects or deficiencies arising during this period is not cured
within the time agreed herein, the sums provided by said improve-
ment security may be used by the City for the completion of such
work. Developer agrees to pay to the City any difference between
the total costs incurred to perform the work, and any proceeds from
the improvement security.
2.e. Maintenance obliqation- 54 (d). Developer shall
Maintain, or cause to be Maintained the Detention Basin until the
earlier to occur of (a) the acceptance of 100% of the Maintenance
for said improvement by an established Maintenance District(s); or
(b) the City's acceptance of Maintenance for such improvement.
Nothing herein shall be construed as affecting the obligation of
Developer to remove siltation from the Telegraph Canyon Channel as
more fully described in paragraph 4 of this Agreement. Developer
shall provide the City with improvement securities concurrent with
the Developer's submittal to the city of the Maintenance Program,
in the amounts to be determined by the City, in its sole
discretion, to guarantee the maintenance of the Detention Basin,
erosion control facility and associated improvements. In the event
of Developer's default in the performance of its maintenance
4
[I...-?
obligations, Developer agrees to pay to the City any difference
between the total costs incurred by the City to perform such
maintenance work, and any proceeds from the improvement security.
2.f. Maintenance Proqram - (54) (b). Developer shall prepare,
for City's approval, prior to the issuance of the grading permit
for the Detention Basin or other approval for the construction of
the Detention Basin, a maintenance program for the maintenance of
the Detention Basin (hereinafter referred to as "Permanent
Maintenance Program") that shall include, but is not limited to:
a) an operations manual describing the maintenance program and
responsibilities to be performed by the Developer for the ordinary
and usual maintenance and operation of the Detention Basin, b) an
estimate of the cost of such maintenance operations, and c) a
mechanism for financing said maintenance activity. Developer is
responsible for obtaining the approval of the Permanent Maintenance
Program from the applicable federal or state agencies, including
but not limited to the California Department of Fish and Game
and/or the U.S. Army Corps of Engineers.
3. Condition No. 54 - Temporary Detention Basin. In partial
satisfaction of Condition No. 54 of the Project's Tentative Map,
the Developer also agrees to the following:
3.a. Construction - (54) (a) (2). Developer agrees to
construct a private temporary runoff detention basin, or such other
facility approved by the City Engineer, to reduce the quantity of
runoff from Phase 2b of Otay Ranch SPA One, to an amount equal to
less than the present 100 year peak flow ("Temporary Facility").
Developer shall construct the Temporary Facility in strict
conformity and in accordance with the plans and specifications,
approved by the City Engineer. The Temporary Facility shall comply
with all the provisions of the National Pollutant Discharge
Elimination System and the Clean Water Program. Developer
understands and agrees that Developer is responsible for obtaining
all necessary permits, approvals and certifications, if any, from
the applicable federal or state agencies, including but not limited
to the California Department of Fish and Game and/or the U.S. Army
Corps of Engineers. Developer shall complete construction of the
Temporary Facility within one year after the City's issuance of the
first grading permit for the Project.
3 .b. Maintenance Proqram - (54) (b). Developer shall include
a maintenance program for the Temporary Facility, for the city's
approval, on the grading plans for the Temporary Facility.
Developer shall be responsible if necessary, for obtaining the
approval for such maintenance program from the applicable federal
or state agencies, including but not limited to the California
Department of Fish and Game and/or the U.S. Army Corps of
Engineers.
5
I (~4
3.c. Maintenance - (54) (a) (2). Developer shall operate and
maintain the Temporary Facility to the satisfaction of the city
Engineer until such time as the construction of the Detention Basin
has been Completed and accepted by the city. Developer understands
and agrees that Developer shall be solely responsible for the
maintenance and operation of the Temporary Facility and any
liability resulting therefrom. Developer shall provide the city
with improvement securities, in accordance with paragraph 6 below,
to guarantee Developer's maintenance obligations hereunder. In
the event of Developer's default in the performance of its
maintenance obligations, Developer agrees to pay to the city any
difference between the total costs incurred by the city to perform
such maintenance work, and any proceeds from the improvement
security.
4. Condition No. 54 & 55 - siltation Removal. Developer
understands and agrees that Developer shall be required to comply
with the provisions of Condition 54 of the Project's Tentative Map,
prior to the first final "B" map or grading permit for land
draining into Poggi canyon. However, in partial satisfaction of
Condition No. 54 and 55 of the Project's Tentative Map, with
respect to land draining into Telegraph canyon Channel, the
Developer agrees to the following:
4.a. siltation Removal. until all upstream grading within
the Project is completed and erosion protection planting is
adequately established as determined by the City Engineer and
Director of Parks and Recreation, the Developer agrees to remove
siltation from the following areas: a) the existing Telegraph
canyon Channel that extends from Paseo Ladera to the eastern SPA
One boundary as more particularly shown on Exhibit "A-1"; and b)
the Detention Basin. In addition Developer shall remove siltation
attributable to the Project from the following: a)the Detention
Basin for a period of five years after Maintenance of the Detention
Basin is assumed by the city or by a Maintenance District, and b)
the existing Telegraph canyon Channel for five years after the date
the City assumes maintenance of said Channel pursuant to the
"Agreement Regarding Maintenance of the Telegraph canyon Drainage
Channel," adopted by City council Resolution No. 18619. The city
Engineer shall be solely responsible for determining if any
siltation is attributable to the Project.
4.b. Improvement Securities. Developer shall provide the
City with improvement securities, in accordance with paragraph 6
below, to guarantee Developer's siltation removal obligations
hereunder. In the event of Developer's default in the performance
of its siltation removal obligations, Developer agrees to pay to
the city any difference between the total costs incurred by the
City to perform such desiltation work, and any proceeds from the
improvement security.
6
{(,,}O
5. Reimbursement District. Developer understands and agrees that
the City may require an alternative property owner to construct a
detention basin which may benefit and provide service to
Developer's property. In the event this occurs, the Developer
agrees not to protest the formation of an assessment district,
reimbursement district, or some other financing district, if such
a district is formed, which would spread the proportionate share of
the cost of constructing said facility among the property owners
benefiting from the facility, which may include the Developer.
Developer also agrees not to protest the formation of an assessment
district or other financing mechanism for the maintenance of such
facility, if established by the City. This Agreement not to
protest the inclusion of this public improvement within an
assessment district shall not be deemed a waiver of the right to
challenge the amount of any assessment which may be imposed due to
this improvement.
If the Developer constructs or begins construction of the
Detention Basin, and requests the City to form a reimbursement
district, the City staff shall use its best efforts to process and
present to the city Council for its consideration the formation of
such reimbursement district to cover the areas serviced by the
Detention Basin. City shall use its best efforts to
proportionately allocate the cost of the construction of the
Detention Basin among existing and new development that may benefit
from the Detention Basin, as such benefit is determined in the
City's sole discretion. Such efforts may include subject to all
applicable laws including, without limitation, applicable public
hearing and approval requirements. city's obligation to consider
adoption of such reimbursement district shall be discharged by City
holding public hearings as required by the City's Municipal Code
and policies. City reserves the right to approve or disapprove
such a district in its sole and unfettered discretion and City's
disapproval thereof shall not constitute a default hereunder.
6. Security for Performance.
6.1 Cash Deposit. Prior to the City's issuance of the first
grading permit for the Project, Developer shall provide City with
a cash deposit for Developer's Maintenance obligations under this
Agreement, including the desiltation obligations ("Security
Deposit") in the sums set forth in Exhibit "C". City shall hold
the Security Deposit for the duration of Developer's maintenance
obligations hereunder, and expend such deposit solely for purposes
of said maintenance obligations in the event of Developer's default
in the performance of such obligations. Should the City expend the
cash deposit due to Developer's default of its performance
obligations, Developer agrees to redeposit the equivalent sum of
money needed to equal the amount of the deposit required by this
Agreement, as set forth in Exhibit "C", within 30 days of the
City's request for such deposit. All interest earnings on the
Security Deposit shall be retained by the City during this period.
7
¡ (,- /I
Except as provided in the section below, any unexpended amount of
the Security Deposit, including any interest earned, shall be
released and remitted to Developer upon the termination of its
Maintenance obligations as set forth in this Agreement.
6.2 Bonds. Prior to the City's issuance of the first
grading permit for the Project, Developer shall provide City with
Maintenance Bonds for a series of two year terms starting from the
date of issuance of said grading permit, in order to guaranty its
annual maintenance obligations in accordance with the provisions of
this Agreement and in the amounts more fully set forth in Exhibit
"c". The Maintenance Bond(s) shall be issued by a surety with a
Bests A-V rating or better and shall be in a form approved by the
City Attorney. The City Engineer, will review Developer's security
provided herein every two years, when the bond expires and must be
renewed by Developer. The city recognizes bonds are issued for a
two year period, however it will be the responsibility of Developer
to ensure that at no time will Developer leave a gap in providing
security for its outstanding obligations. Developer understands
and agrees that the City shall not issue any grading permits until
the bonds and cash deposit have been delivered and approved as
sufficient by the city.
At the bond renewal time, the city Engineer may reduce the
bond requirement by an appropriate amount determined by the City
Engineer if it is determined by the city Engineer that the
maintenance obligations have been reduced.
6.3 Refund. In the event that the annual Maintenance costs
are reduced, the city Engineer may review at Developer's request to
reduce, proportionately, the amount of the Security Deposit and/or
Maintenance Bond required by this section. City shall not
unreasonable withhold approval of such request.
7. Building Permits. Developer understands and agrees that the
performance of Developer's obligations hereunder is required for
the health and safety of the residents of the City of Chula vista.
Therefore, Developer agrees that the City shall have the absolute
and unfettered right to withhold the issuance of any building
permit for any residential units within the Project if the
Developer is determined by the City not to be in compliance with
the terms of this Agreement.
8. Miscellaneous Provisions.
8.1 Attornevs' Fees. In the event that either Party
commences litigation for a specific performance or damages for
breach of this Agreement, the prevailing party shall be entitled to
a judgment against the other for an amount equal to reasonable
attorneys' fees and court costs incurred.
8
tl,l1--
8.2 Indemnification. Developer further understands and
agrees that City, as indemnitee, or any officer or employee
thereof, shall not be liable for any injury to person or property
occasioned by reason of the acts or omissions of Developer, its
agents or employees, or indemnitee, related to the construction of
the Detention Basin and the Temporary Facility and Developer's
maintenance activities. Developer further agrees to protect and
hold the City, its officers and employees, harmless from any and
all claims, demands, causes of action, liability or loss of any
sort, because of or arising out of acts or omissions of Developer,
its agents or employees, or indemnitee, related to the construction
of the Detention Basin and the Temporary Facility and Developer's
maintenance activities. The approved improvement securities
referred to above shall not cover the provisions of this paragraph.
Such indemnification and agreement to hold harmless shall extend to
damages to adjacent or downstream properties or the taking of
property from owners of such adjacent or downstream properties as
a result of Developer's construction and maintenance activities as
provided herein. It shall also extend to damages resulting from
diversion of waters, change in the volume of flow, modification of
the velocity of the water, erosion or siltation, or the modifica-
tion of the point of discharge as the result of the construction of
the Detention Basin and Temporary Facility and maintenance
activities. The approval of plans for the Detention Basin and
Temporary Facility and any related improvements shall not
constitute the assumption by City of any responsibility for such
damage or taking, nor shall City, by said approval, be an insurer
or surety for the construction of the Detention Basin and Temporary
Facility and any related improvements. The provisions of this
paragraph shall become effective upon the execution of this
Agreement and shall remain in full force and effect regardless of
the City's acceptance of the Detention Basin.
8.3 Entire Aqreement. This Agreement, together with any
other written document referred to or contemplated herein, embody
the entire Agreement and understanding between the parties relating
to the subject matter hereof and any and all other prior or
contemporaneous oral or written agreements are hereby superseded.
This Agreement may be amended, but only pursuant to a written
amendment properly authorized and executed by both parties hereto.
8.4 Compliance with Laws. In the performance of its
obligations under this agreement Developer shall comply with any
and all applicable federal, state and local laws, regulations,
policies, permits and approvals.
8.5 Exhibits. All attached Exhibits referred to herein are
hereby incorporated herein by this reference.
8.6 Term. This agreement shall remain in effect for so long
as either party has executory obligations hereunder.
9
¡Irl?
8.7 Recordinq. The parties hereto shall cause this
Agreement to be recorded in the Official Records of the County of
San Diego.
8.8 Assiqnment. This Agreement shall be binding upon and
inure to the benefit of the successors, assigns and interests of
the parties as to any or all of the real property described herein
as the Project. The obligations of the Developer under this
Agreement shall not be assigned in whole or in part, without the
express written consent of the city.
[NEXT PAGE IS SIGNATURE PAGE]
¡(.--li
10
IN WITNESS WHEREOF, the parties have entered into this
Agreement as of the day and year first above written.
Dated: CITY OF CHULA VISTA
a municipal corporation
By:
Mayor Shirley Horton
Attest:
Beverly Authelet, City Clerk
Approved as to form:
John M. Kaheny, City Attorney
Dated:
By:
[name of person, title]
By:
[name of person, title]
H:\HomolAtWmoy\B....1
¡"ly 31.1997 (lO:26am)
1/,.-/(
11
List of Exhibits to be Prepared by Engineering
Exhibit A....Legal Description
Exhibit A-1..Location Plat
Exhibit B.. ..Conditions of Tentative Map Approval, condition 54 and 55
Exhibit C... . List of Improvement Securities; purpose and amounts
/I-rC
12
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RESOLUTION NO.~~
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING A DETENTION BASIN AND
SILTATION AGREEMENT BETWEEN THE CITY AND
VILLAGE DEVELOPMENT L.L.C. TO PROVIDE FOR THE
CONSTRUCTION, MAINTENANCE AND OPERATION OF
DETENTION BASINS AND REMOVAL OF SILT FROM SAID
BASINS AND TELEGRAPH CANYON CHANNEL AND
AUTHORIZING THE MAYOR TO EXECUTE SAID
AGREEMENT
WHEREAS, on November 19, 1996 by Resolution NO. 18398,
the city approved Tentative Map No. 96-04 for a portion of Villages
One and Five of otay Ranch; and
WHEREAS, the Tentative Map conditions require that, prior
to issuance by the City of a grading permit, the developer shall
enter into agreement with the city to provide for the construction
and maintenance of certain drainage improvements; and
WHEREAS, the developer is currently processing grading
plans with the City and issuance of the grading permit is
anticipated shortly.
NOW, THEREFORE, BE IT RESOLVED the City Council of the
city of Chula vista does hereby approve a Detention Basin and
siltation Agreement between the City and Village Development L.L.C.
to provide for the construction, maintenance and operation of
detention basins and removal of silt from said basins and Telegraph
Canyon Channel, a copy of which is on file in the office of the
city Clerk as Document No.
BE IT FURTHER RESOLVED that the Mayor of the city of
Chula vista is hereby authorized and directed to execute said
Agreement for and on behalf of the city of Chula vista.
Presented by Approved as to form by
(~~~
John P. Lippitt, Director of John M. Kaheny, City Attorney
Public Works
C:lrslsilt.agr
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EXHIBIT "A"
LEGAL DESCRIPTION
THOSE PORTIONS OF QUARTER SECTIONS 14,15,16,38,39 AND 41 OF RANCHO DE LA
NACION, IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA ACCORDING TO MAP THEREOF NO. 11, MADE BY MORRILL ON FILE IN THE
OFFICE OF THE COUNTY RECORDER OF SAID SAN DIEGO COUNTY, BEING DESCRIBED
AS FOLOWS:
BEGINNING AT THE INTERSECTION OF THE WESTERLY LINE OF PASEO RANCHERO
AND THE SOUTHERLY LINE OF TELEGRAPH CANYON ROAD AS SHOWN ON THE
REVISED TENTATIVE MAP FOR PORTIONS OF THE OTAY RANCH SPA 1, CHULA VISTA
TRACT 96-04, APPROVED BY CITY COUNCIL ON NOVEMBER 19,1996, BY RESOLUTION
NO. 18398; THENCE SOUTHERLY ALONG THE WESTERLY LINE OF SAID PASEO
RANCHERO TO ITS INTERSECTION WITH THE SOUTHERLY LINE OF EAST ORANGE
AVENUE, AS SHOWN ON SAID REVISED TENTATIVE MAP; THENCE EASTERLY AND
NORTHEASTERLY ALONG THE SOUTHERLY LINE OF EAST ORANGE AVENUE TO ITS
INTERSECTION WITH THE EASTERLY LINE OF SAID QUARTER SECTION 14; THENCE
NORTHERLY ALONG THE EASTERLY LINE OF QUARTER SECTION 14 AND THE
EASTERLY LINES OF QUARTER SECTIONS 15 AND 16 TO THE SOUTHERLY LINE OF
TELEGRAPH CANYON ROAD AS SHOWN ON SAID REVISED TENTATIVE MAP; THENCE
SOUTHWESTERLY AND WESTERLY ALONG SAID SOUTHERLY LINE TO THE POINT OF
BEGINNING.
TOGETHER WITH THAT PORTION OF THE FRACTIONAL SOUTHWEST QUARTER,
SECTION 3, AND THAT PORTION OF THE NORTHWEST QUARTER, SECTION 3, THAT
PORTION OF LOTS 1, 2 AND 31N SECTION 4, TOWNSHIP 18 SOUTH, RANGE 1 WEST,
SAN BERNARDINO MERIDIAN AND THAT PORTION OF THE SOUTHWEST QUARTER,
SECTION 34, TOWNSHIP 17 SOUTH, RANGE 1 WEST, SAN BERNARDINO MERIDIAN, ALL
IN THE COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTON OF THE SOUTHERLY LINE OF OTAY LAKES ROAD
AND THE WESTERLY LINE OF FRACTIONAL SECTION 4; THENCE SOUTHERLY ALONG
THE WESTERLY LINE OF SAID SECTION 4 TO ITS INTERSECTION WITH THE
PAGE 1 OF 2
: OMS \\PCSERVE R\mapping\Legals\0025\236\236A05 .doc /I /11 tÀ.-
WO 0025-236 7/31/97
SOUTHERLY LINE OF EAST ORANGE AVENUE, AS SHOWN ON SAID REVISED
TENTATIVE MAP; THENCE EASTERLY ALONG THE SOUTHERLY LINE OF SAID ORANGE
AVENUE TO ITS INTERSECTION WITH THE WESTERLY LINE OF THE PROPOSED STATE
HIGHWAY SR-125; THENCE NORTHEASTERLY ALONG THE WESTERLY LINE OF SAID
PROPOSED HIGHWAY TO ITS INTERSECTION WITH THE SOUTHERLY LINE OF SAID
OTA Y LAKES ROAD; THENCE WESTERLY ALONG THE SOUTHERLY LINE OF SAID OTA Y
LAKES ROAD TO THE POINT OF BEGINNING.
EXCEPTING THEREFROM THOSE PORTIONS LYING WITHIN THE PROPERTIES
DESCRIBED TO THE OTAY MUNICIPAL WATER DISTRICT BY DEEDS RECORDED
SEPTEMBER 15,1965 AS FILE NO. 167296, SERIES 6, BOOK 1965 AND RECORDED
SEPTEMBER 30,1965 AS FILE NO. 177739, SERIES 6, BOOK 1965 AND RECORDED
NOVEMBER 20,1991 AS FILE NO. 91-0599686 AND RECORDED SEPTEMBER 3,1993 AS
FILE NO. 1993-0585947 AND RECORDED FEBRUARY 17,1994 AS FILE NO. 1994-0111823,
ALL OF OFFFICIAL RECORDS.
PAGE 2 OF 2
: DM S I\PCS ERVERlmappinglLegalsI0025\236\236A05 .doc 11/l1b
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EXHIBIT "B"
Detention Basin and Siltation Agreement
54. Prior to approval of (1) the first final '13" Map or grading permit for land draining into the
Poggi Canyon or (2) the first final '13" Map or grading permit which requires construction of Santa
Madera between Telegraph Canyon Road and Morgan Hill Drive ("Temporary Roadway"), the
developer shall:
a. Guarantee the construction of the applicable drainage facility, unless otherwise
approved by the City Engineer as follows:
1. Runoff detention/desilting basin and naturalized channel in Poggi Canyon; or
2. Runoff detention Basin in Telegraph Canyon Channel
The City Engineer may approve that these facilities are constructed at a later time if the
developer provides private temporary runoff detention basins or other facilities,
approved by the City Engineer,. which would reduce the quantity of runoff ITom the
development to an amount equal to less than the present 100 year flow. Said
temporary facilities shall comply with all the provisions of the National Pollutant
Discharge Elimination System (NPDES) and the Clean Water Program. Prior to
issuance of any grading permit which approves any temporary facility, the developer
shall enter into an agreement with the City to guarantee the adequate operation and
maintenance (0 & M) of said facility. The developer shall provide security satisfactory
to the City to guarantee the 0 & M activities, in the event said facilities are not
maintained to City standards as determined by the City Engineer.
The developer shall be responsible for obtaining all permits and agreements with the
environmental regulatory agencies required to perform this work.
b. Prepare a maintenance program including a schedule, estimate of cost, operations
manual and a financing mechanism for the maintenance of the applicable facilities. Said
program shall be subject to approval of the City Engineer, the Director of Parks and
Recreation, and the applicable environmental agencies.
c. Enter into an agreement with the City of Chula Vista and the applicable environmental
agencies (Fish and Game, Fish and Wildlife) wherein the parties agree to implement the
maintenance program.
d. Enter into an agreement with the City where the developer agrees to the following:
1. Provide for the maintenance of the proposed detention basin in Telegraph
Canyon and the proposed naturalized channel and detention basin in Poggi
Canyon until such time as maintenance of such facilities is assumed by the City
or an open space district.
2. Provide for the removal of siltation in the Telegraph and Poggi Canyon
Channels (including detention basins) until all upstream grading within the
development is completed and erosion protection planting is adequately
J{~/Î P~op-t_o12- .
EXHIBIT "B"
Detention Basin and Siltation Agreement
established as determined by the City Engineer and Director of Parks and
Recreation.
3. Provide for the removal of any siltation in the Telegraph and Poggi Canyon
Channels (including detention basins) attributable to the development for .a
minimum period offive years after maintenance of the facility is assumed by the
City or an open space district.
55. Enter into an agreement with the City, prior to approval of the first final 'B"Map or grading
pennit for land draining into the existing Telegraph Canyon Channel, where the developer agrees to
perform the following activities within the portion of said existing channel extending ITom Paseo
Ladera to the eastern subdivision boundary:
a. Provide for the removal of siltation until all upstream grading within the development is
completed and erosion protection planting is adequately established as determined by
the City Engineer and Director of Parks and Recreation.
b. Provide for the removal of any siltation attributable to the development for a minimum
period of five years after maintenance of the channel is assumed by the City or an open
space district.
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EXHIBIT "C"
SECURITY REQUIREMENTS
DETENTION BASIN AND SILTATION AGREEMENT
PERMANENT DETENTION BASIN
1. CONSTRUCTION (Paragraph 2.b of the agreement)
* Faithful Performance Bond Bond (term = 3 years) in the amount of
$250,000 to be submitted prior to the
issuance of the permit for the mass grading
of Phase 2b.
* Materials & Labor Bond Bond (term = 3 years) in the amount of
$250,000 to be submitted prior to the
issuance of the permit for the mass grading
of Phase 2b.
These bond amounts have been estimated at 200% of the construction cost
estimate of the detention basin since improvement plans have not been submitted
to the City.
2. CONSTRUCTION GUARANTY (Paragraph 2.d of the agreement)
* Guaranty Bond Bond (term = I year) in the amount of 15%
of the construction cost of the detention
basin to be submitted prior to the final
acceptance of the permanent detention basin
by the City.
3. MAINTENANCE (Paragraph 2.e of the agreement)
* Maintenance Bond/Deposit Adequate security in the amount approved
by the City would be submitted concurrent
with the submittal to the City of the
Maintenance Program for the permanent
detention basin.
I
\(--:f-\
Exhibit "C"
Security Requirements
Detention Basin and Siltation Agreement
TEMPORARY DETENTION BASIN
I. MAINTENANCE (Paragraph 3.c of the agreement)
* Cash Deposit Cash deposit in the amount of$35,000 to be
submitted concurrent with the execution of
this agreement.
TELEGRAPH CANYON CHANNEL
I. REMOVAL OF SILTATION (paragraph 4.b of the agreement)
* Cash Deposit Cash deposit in the amount of$50,000 to be
submitted concurrent with the execution of
this agreement.
* Maintenance Bond Bond (series of two year tenus) in th~
amount of $180,000 to be submitted prior to
the issuance of the pennit for the mass
grading of Phase 2b.
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Memhers of the Chula Vista City CC;u.IIClÌ
CITY u¡. ('[-in. A ViSTA
'764" ,\v"Hue
(hub ViC;¡'1, CalííOJma 91'i¡(Ì
Re: Agenda It...m 11. August 5, 1997 Councíl Agenda
Dear ~Javor Horton and Members of the City Col.ll)ciL
Village Development respectfullv requests that yoU! council continue tor one We'»<-
'-gencJa Item 11 concerning a Detention Basin and Siltation Agreement tOt me "~cay
n "neh Tentative Map. The purpose of the continuance is to provide an opportUnity tc'
'("('" " recently raised issues
, üur consideration of tbis request is appreciatea.
-"..,,'!d..
'. U ¡ .'\GE DEVEI OPMENT
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'. ,,'c ["c.-idem ¿/
(i<òorge Kremple, Deputy ('nv ;vlanager
john Güss, City Manag:;;r
Ann Moore. Assistant CIty A.tlomey
kick Ro,;aler, Senior Planner
Lnmbardo DeTrinidact, CivIl Engineer
(:""," """un". 0" ~,."
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.----....---- '---"'~'~~~-'-'--T-"- - - -------'_...
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COUNCIL AGENDA STATEMENT /:J-
Item -
Meeting Date 8/5/97
ITEM TITLE: Resolution J 8'7'/7 Establishing dates for property owners to be ready
to receive underground service and the removal of poles and overhead
facilities within Underground Utility District No. 129 on Otay Lakes Road
from Ridgeback Road to Apache Drive
SUBMITTED BY: Director of Public Works ;;V
REVIEWED BY: City Manager (4/5ths Vote: Yes_NoX)
On October 22, 1996 by Resolution No. 18467 the City Council established Underground Utility
District No. 129 on Otay Lakes Road from Ridgeback Road to Apache Drive. This resolution was
approved after a Public Hearing in which all the affected property owners were notified of the
hearing. In accordance with Section 15.32.150 of the Chula Vista Municipal Code, Resolution
16683 states that the City Council shall by subsequent resolution fix the date upon which the affected
property owners must be ready to receive underground service and the date by which poles, overhead
wires and associated structures shall be removed. The conversion of overhead utilities to
underground is scheduled to be completed in December 1997.
RECOMMENDATION: That Council:
1. Set October 6, 1997 as the date by which owners within Underground Utility District No.
129 on Otay Lakes Road from Ridgeback Road to Apache Drive shall be ready to receive
underground service;
2. Set December 5, 1997 as the date by which poles, overhead wires and associated structures
shall be removed within Underground Utility District No. 129 on Otay Lakes Road from
Ridgeback Road to Apache Drive.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION:
On October 22, 1996 by Resolution No. 18467 the City Council established Underground Utility
District No. 129 on Otay Lakes Road from Ridgeback Road to Apache Drive. After a meeting of
the utility Advisory Committee on July 7,1997, the utility companies infonned Engineering staff
that they can meet the following schedule for the underground conversion district:
Date for Customers to be ready to receive October 6, 1997
Underground Service
Date for the completion of undergrounding December 5, 1997
work and the removal of overhead utilities
and poles.
J.J.-j
Page 2, Item -
Meeting Date..J!LSL21
The work is being coordinated with the current widening of Otay Lakes Road (STM-322). The
conversion work by the property owners involves trenching, backfill and installation of conduit from
property line to point of connection.
Chula Vista City Council Policy No. 585-1 established a mechanism that helps property owners with
the cost of the conversion work from the distribution lines to the structure (must involve overhead
electrical services). Said policy provides for the reimbursement of property owners at a rate of $30
per foot of trenching. There are nine parcels in the district however, four properties already receive
underground electrical service thus do not qualify for a reimbursement. Exhibit B lists the five
properties being reimbursed a total of $6,900.
The City is responsible for the trench work and placement oftelephone conduit for the conversion
of Fire Station No.4. This work is estimated to be $1,100. The contractor for the widening will be
asked to bid on this work as a change order to the project.
All property owners within the district and occupants directly affected by the conversion work will
be notified by letter after adoption of this resolution. Exhibit C gives a list of those to be notified.
A transparency showing the district boundaries is available for Council viewing.
FISCAL IMP ACT: The cost of pole removal, undergrounding overhead facilities and private
property conversion reimbursements as outlined above is estimated to be $616,900. SDG&E's
allocation funds (Rille 20-A) will cover the estimated cost of the project for SDG&E facilities. The
City's cost to convert the fire station's telephone and cable services is estimated to be $1,100. It is
staff's intention to include this cost in the street improvement project and not the undergrounding
district (Rule 20-A) project.
Attachments: Exhibit A - Boundary Map ~
Exhibit B - List of parcels and property owner ifying for reimbursement
Exhibit C - Notification Mailing list ¡S,'ð
Copy of Resolution .;;.O
DCD: FileNo: 0810-20-AY-O98 H: \HOME\ENGINEER \AGENDA \UND IS I 29 .DCD
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Exhibit B
Maximum
AR NO. APN Name Mall Add,ee, Ctty Addres, BUSINESS Reimburse
1 64218001 CityofChulaVista ChulaVista,CAB1B10 Fire Station
2 64211001 Jose & Cecilia Vazquez Chula Vista, CA B1B13 S. F. Home
3 64211002 Bela Family Trust Bonita, CAB1B02 S. F. Home
4 64211003 Mana & Margarete Failla ChulaVista,CAB1B13 S. F. Home 1,800
5 64211004 Carlo, & Carmen Valaneia Chula Vista, CA 91B13 S. F. Home 1.200
6 64211005 Jo,eph & Elizebeth Bonin Chula Vista, CA 91913 S. F. Home 1.200
7 64211006 Urbo" & Veronica Jones ChulaVista,CA91913 S. F. Home 1,650
8 64211007 Jesus Trejo ChulaVista, CA B1B11 S. F. Home 1,050
9 59413028 Sweetwater Union High ChulaVista,CAB1911 BonitaVistaH.S.
Tolal 6,BOO
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Exhibit C
P R NO. APN Name Mail Address City
1 64218001 City of Chula Vista Chula Vista, CA 91910
2 64211001 Jose & Cecilia Vazquez Chula Vista, CA 91913
3 64211002 Belo Family Trust Bonita, CA 91902
4 64211003 Mario & Margarete Failla Chula Vista, CA 91913
5 64211004 Carlos & Carmen Valencia Chula Vista, CA 91913
6 64211005 Joseph & Elizabeth Bonin chula Vista, CA 91913
7 64211006 Urbon & Veronica Jones Chula Vista, CA 91913
8 64211007 Jesus Trejo Chula Vista, CA 91911
9 59413028 Sweetwater Union High Chula Vista, CA 91911
1 64218001 City of Chula Vista Chula Vista, CA 91913
3 64211002 Current Resident Chula Vista, CA 91913
8 64211007 Current Resident Chula Vista, CA 91913
9 59413028 Sweetwater Union High Chula Vista, CA 91913
I ).---~
RESOLUTION NO. IÇ1<{1
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ESTABLISHING DATES FOR PROPERTY
OWNERS TO BE READY TO RECEIVE UNDERGROUND
SERVICE AND REMOVAL OF POLES AND OVERHEAD
FACILITIES WITHIN UNDERGROUND UTILITY DISTRICT
NO. 129 ON OTAY LAKES ROAD FROM RIDGEBACK ROAD
TO APACHE DRIVE
WHEREAS, the City Council has heretofore by Resolution
No. 18467 established Underground Utility District No. 129 on Otay
Lakes Road from Ridgeback Road to Apache Drive; and
WHEREAS, it is now desired, pursuant to said resolution,
to fix the date on which affected property owners must be ready to
receive underground service.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the
City of Chula Vista that the following dates are hereby established
ordering the property owners to prepare properties for receipt of
underground utilities:
1. The property owners within Underground Utility
District No. 129 shall be ready to receive underground
service from San Diego Gas and Electric Company on
October 6, 1997.
2. Poles, overhead wires and associated overhead
structures shall be removed from parcels within
Underground Utility District No. 129 by December 5,1997.
BE IT FURTHER RESOLVED tha~ the City Clerk of the City of
Chula Vista be, and she is hereby directed to forward a certified
copy of this resolution to all affected utility companies and
property owners.
Presented by Approved as .to form by
John P. Lippitt, Director of
Public Works
C:\rs\UUDPoles
J,2-;s );¿ - 7
COUNCIL AGENDA STATEMENT
Item /3
Meeting Date 8/05/97
ITEM TITLE: Resolution f1¿) Ý Adopting 1997 Standard Specifications for
Public Works Construction, "Greenbook", Regional Supplements and Standard
Drawings, Chula Vista Standard Drawings and Standard Provisions, and The
SUBMITTED BY: "'. of 0<'"""". _ffil 7-tiOO """""" ~_.
Di""" of "'Ii Ii, W ocb ~
REVIEWED BY: City Manager-J:J\ ~. (4/5ths Vote: Yes_No..K.)
1.///
In 1997, the "Standard Specifications for Public Works Construction", commonly known as the
"Greenbook" was revised by established committees representing all facets of the construction industry
and government to reflect changes in technologies and/or performance tests. The Regional Standards
Committee (which includes Chula Vista) has revised the regional standard drawings and specifications
have published the revised 1997 edition. Engineering staff has also revised the City of Chula Vista
Standard Special Provisions; City of Chula Vista Part I Special Provisions-General; and the City of
Chula Vista "Department of Public Works Design Standards - Construction Standards."
RECOMMENDATION: That the City Council approve the resolution adopting the following
documents:
I) Standard Specifications for Public Works Construction - 1997 Edition "Greenbook"
2) 1997 Regional Supplement Amendments to Standard Specifications for Public Works
Construction - 1997 Edition (Greenbook Regional Supplements)
3) San Diego Area Regional Standard Drawings - dated March 1997
4) City of Chula Vista Standard Special provisions - dated July 1997
5) City of Chula Vista Part I Special Provisions - General with Revisions
6) City of Chula Vista Department of Public Works Design Standards - Construction
Standards, 1997 edition
7) State of California, Department of Transportation, Standard Plans - dated July 1995
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION:
Every three years the "Standard Specifications for Public Works Construction" which is more
familiarly known as the "Greenbook" is revised to reflect changes in Technologies and/or performance
tests. The most recent edition adopted by the City is the 1994 edition which has been superseded by
the 1997 edition.
On October 24, 1995, the City Council by Resolution 18086, adopted the 1994 San Diego Regional
Standard Drawings and Specifications (See Attachment A for Resolution and Minutes of meeting).
On December 5, 1995, the City Council by Resolution 181-40 adopted the 1995 Supplement to the
Greenbook Standard Specifications for Public Works Construction, 1994 Edition. These standard
drawings and specifications (properly known as the "Greenbook") are currently being used by the City
13--- ,
Page 2, Item-
Meeting Date 8/05/97
for the design and construction of public works facilities (i.e. drainage, sewers, streets, street lights,
and traffic signals, etc.) whether privately or publicly financed.
The continuing work of the San Diego Regional Standards Committee (including Chula Vista) is to
review the standards and to act upon suggested additions or changes to the standard drawings and
specifications and to review the "Greenbook" publication. The standard drawings and specifications
are published every three years and reflect these additions and changes as adopted by the Regional
Standards Committee. The 1997 "Regional Supplement Amendments" (to the Greenbook) and
"Regional Standard Drawings" have been published. Engineering staff accordingly has also revised
the City of Chula Vista "City of Chula Vista Standard Special Provisions," "City of Chula Vista Part
1 Special Provisions - General," and the "Department of Public Works Design Standards -
Construction Standards." The City Revisions to the Standard Drawings and Specifications are
required in order to strengthen our design standards (i.e. construction details, type of construction
materials, construction methods, and alternate products.).
The Associated General Contractors of America (AGC), Building Industry Association (BIA) ,
Engineering and General Contractors Association (EGCA), Construction Industry Federation (CIF)
and the San Diego County Rock Producers Association (SDCRPA) all representing the construction
industry within the San Diego region have representatives on the San Diego Regional Standards
Committee and have participated in the development of the 1997 Regional Standard Drawings and
Specifications which staff is requesting the City Council to adopt. The American Public Works
Association (APW A) and the California Council of Civil Engineers and Land Surveyors also has
representatives on the San Diego Regional Standards Committee.
The revisions to the City of Chula Vista "Standard Special Provisions" and "Part I Special Provisions"
this year are very minor and staff did not send the changes to the engineering or construction
community for review or comment.
The only revisions to the "Department of Public Works Design Standards - Construction Standards"
that were not minor were the following:
1) CVCS No.4, "Narrow Trenching Type "I" & "J" and associated Backfill and Surface
Restoration" was revised to require that narrow trench paving in bicycle lanes repave
the entire bicycle travel way instead of a narrow band.
2) CVCS No. 20, "Detail Sewer Lateral in Landscaped Areas" is a new drawing that
covers the portion of sewer laterals constructed on private property for the area not
shown on the Regional Standard Drawing No. S-13, "House Connection (Sewer
Lateral)."
3) CVCS No. 21, "Detail Private Sewer Lateral in P.C.C. Driveway" is a new drawing
that covers the portion of sewer laterals constructed on private property for the area
not shown on the Regional Standard Drawing No. S-13, "House Connection (Sewer
Lateral)."
Is~)..
Page 3, Item -
Meeting Date 8/05/97
A copy of drawings CVCS No.4, CVCS No. 20, and CVCS No. 21 are included as Attachment B
for Council's information.
The Director of Public works will have copies of the material recommended for adoption and
summaries of the revisions to the Standard Specifications available for Council viewing in the Public
Works Department - Engineering Division, the office of the City Clerk, and at the Council meeting.
FISCAL IMPACT: The adoption of these revisions will have no fiscal impact other than the costs to
purchase or print the approved documents. These costs, which are estimated to be less than $1,000,
are included as a routine item in the Department's operating budget.
RS:jrh
H:\HOME\ENGINEERIAGENDA IDRA W -97.JRH
File No: 0715-30-KY-022
}3~3
ATTACHMENT A
COUNCIL AGENDA STATEMENT
Item~
Meeting Date 12/5195
ITEM TITLE: Resolution' c¡ 14() Adopting the 1995 Supplement to "Greenbook"
Standard Specifications for Public Works Construction, 1994 Edition and
Chula Vista Design Standard No. 34
SUBMITTED BY: Director of Parks & ReCre¡n
Director of Public Works
REVIEWED BY: City Manager (4/5ths Vote: YecNo.xJ
On October 24, 1995, the City Council by Resolution 18086 adopted the 1994 Standard
"Greenbook" Specifications, Regional Supplements and Standard Drawings, and the Chula Vista
Standard Drawings and Standard Provisions, excluding Chula Vista Design Standard No. 34 (see
Exhibit A). In addition, Council directed staff to meet with representatives of the development
community to work out their concerns with the drawing (CVDS No. 34). After a series of meetings
with developers active in Chula Vista, staff has revised CVDS No. 34 to partially address their
concerns. All major builders were invited to participate in one or more of these meetings and those
attending included McMillin, Eastlake, California Pacific Homes, and Brehm Communities.
In the ensueing period, the Regional Standards Committee adopted the 1995 Supplement to the
Greenbook Standard Specifications for Public Works Construction, 1994 Edition. This supplement
is an integral part of the Greenbook and needs to be adopted by Council to enable its use in the City.
RECOMMENDATION: That Council approve the resolution adopting the 1995 Supplement to the
. Greenbaok Standard Specifications for Public Works Construction, 1994 Edition and Chula Vista
Design Standard No. 34.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION:
The Greenbaok has been adopted by more than 200 cities, and other governmental agencies in
Southern California. It has been written and promulgated as a joint effort of a joint committee
comprised of the Southern California Chapter of the American Public Works Association and
Associated General Contractors of California and various governmental agencies. The work of this
joint committee is reviewed and adopted by the San Diego Regional Standards Committee, which
includes the City of Chula Vista.
On October 24, 1995, Council by Resolution 18086 adopted the 1994 edition of the Greenbaok. The
1995 supplement before you tonight, had not been reviewed by the San Diego Regional Standards
Committee and, therefore, could not be presented to you then. Staff anticipated that this review
13ft-{-
Page 2, Item ~
MeeÔDg Date 12/5195
would be addressed by the committee in January or February 1996, after some conflicts internal to
the Committee had been resolved. Fortunately, these conflicts were resolved at the November
meeting of the committee, making it possible to proceed with the review and approval of the 1995
supplement (Exhibit B).
The major changes the supplement addresses deal with specifications for:
a) chemical admixtures
b) latex modified asphalt concrete
c) stonework for erosion control
d) high density polyethylene (HDPE) spirally-wound profile wall liner pipe.
At the October 24,1995 Council meeting, staff presented for adoption, the Chula Vista Standard
Drawings. These drawings are used by staff and private engineers to standardize the infrastructure
and land development improvements built in the City. One of these drawings (CVDS No. 34) was
prepared with the intent to depict conditions for access to Open Space areas. A copy of this drawing
is attached as Exhibit C. It incorporates the following:
a) Open Space wall location relative to property line
b) Minimum dimension from top of slope to face of wall
c) Deletion of old "slope rounding" drawing to incorporate some slope transition from
face of slope to top and/or bottom of slope
These requirements were previously incorporated on a project by project basis by staff during the
plan check process. This practice resulted in conflicts with the developer's plans and extended the
review/approval process. To resolve these problems, staffprepared CV OS No. 34 utilizing a width
of 4 feet for the bench of shoulder to be provided at the top of slope to level area. The 4 foot width
was proposed because:
. It provides safe access to open space areas for maintenance activities, brush clearance for fire
safety, landscape and irrigation maintenance, and prevents open space encroachments.
. This requirement was given to and complied with by the Baldwin Company for their
Telegraph Canyon Estates project.
. Rancho del Rey has met this criteria in past projects.
Unfortunately, the drawing raised several concerns with area developers and its approval was
postponed until staff met with the development community to resolve them. Through a series of
meetings, the drawing has now been modified to reflect the input of developers active in Chula Vista
(see Exhibit D). The modifications made to the drawing are: . .
. Deleted the browditch and slope rounding identification
. Provides for different minimum widths (4 feet for large slopes and 2 feet for open space
adjacent to streets)
. Provides discretion for the Director of Parks and Recreation or hislher designee to waive or
modify the requirements, if certain criteria are existing or designed into the project.
\'3 -~
Page 3, Item ~
Meeting Date 12/5/95
As modified, the drawing is still not totally acceptable to the development community that helped
in its review, because they feel the 4 foot bench width is excessive and penalizes the property owner,
as it may reduce the usable rear yard size. It is the Parks and Recreation Department's position,
however, that the 4 foot bench is necessary in order to provide safe access for maintenance and brush
clearance for fire safety concerns. In addition, the impact to the rear yard size can be eliminated
and/or alleviated at the time the developer's engineer design the project's grading and lot layout.
Adoption of the drawing will provide a clear standard for the design engineers to follow.
FISCAL IMPACT: The adoption of these revisions will have no fiscal impact other than the costs
to purchase or print the approved documents. These costs are estimated to be less than $1,000 and
have been budgeted in the Department's operating budget.
Exhibit A - Resolution 18086
Exhibit B - 1995 Supplement to the Greenbook, 1994 Edition
Exhibit C - CVDS No. 34, as submitted to Council 10/24/95
Exhibit D - CVDS No. 34, as modified 11/10/95
RS:sb
File No: 0715-30-KY022
M: \HOMEIEN GINEER \A GENOA 1ST AND34 . RS
\~/l.o
,-r'" -. "'-'-
COUNCIL AGENDA STATEMENT
Item , ...
MeetiD¡ Date 10/24/95
ITEM TITLE: Resolution 180 I ú Adopting 1994 Standard .Greenbook"
Specifications, Regional Supplements and Standard Drawin¡s, and Chula
Vista Standard Drawin¡s and Standard Provisions
SUBMfITED BY: Director of Puolic wor~}t .ft./
REVIEWED BY: City Manager (4/5ths Vote: YesJo..XJ
In 1994, the "Standard Specifications for Public Works Construction", properly known as the
"Greenbook" was revised by established committees representing all facets of the construction
industry and government to reflect changes in technologies and/or performance tests. The Regional
Standards Committee (which includes Chula Vista) has revised the regional standard drawings and
specificàtions have published the revised 1994 edition. Engineering staff has also revised the City
of Chula Vista Standard Special Provisions; City of Chula Vista Part 1 Special Provisions-General;
and the City of Chula Vista "Department of Public Works Design Standards - Construction
Standards."
RECOMMENDATION: That the City Council approve the resolution adopting the following
documents:
1) Standard Specifications for Public Works Construction.. 1994 Edition "Greenbook"
2) 1994 Regional Supplement Amendments to Standard Specifications for Public Works
Construction - 1994 Edition (Greenbook Regional Supplements)
3) San Diego Area Regional Standard Drawings - dated March 1995
4) City of Chula Vista Standard Special provisions - dated September 1995
5) City of Chula Vista Part 1 Special Provisions - General with Revisions
6) City of Chula Vista Department of Public Works Design Standards .. Construction
Standards
. "
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION:
Every three years the "Standard Specifications for Public Works Construction. which is more
familiarly known as the .Greenbook" is revised to reflect changes in Technologies and/or
performance tests. The most recent edition adopted by the City is the 1991 edition which has been
superseded by the 1994 edition.
On October 6, 1992, the City Council by Resolution 16833, adopted the 1992 San Diego Regional
Standard Drawings and Specifications (See Attachment A for Resolution and Minutes of meeting).
These standard drawings and specifications (properly known as the "Greenbook" are currently being
used by the City for public works construction whether it is privately or publicly fmanced.
The continuing work of the San Diego Regional Standards Committee (including Chula Vista) is to
review the standards and to act upon sugges~ additions or changes to the standard drawings and
\~-l
Page 2, Item ,¡..
Meeting Date 10/24/95
specifications and to review the "Greenbook" publication. The standard drawings and specifications
are published every three years and reflect these additions and changes as adopted by the Regional
Standards Committee. The 1994 "Regional Supplement Amendments" (to the Greenbook) and
"Regional Standard Drawings" have been published. Engineering staff accordingly has also revised
the City. of Chula Vista "City of Chula Vista Standard Special Provisions," "City of Chula Vista Part
I Special Provisions - General," and the "Department of Public Works Desi¡n Standards -
Construction Standards. "
The Associated General Contractors of America (AGe), Building Industry Association (BlA),
Engineering and General Contractors Association (EGCA), Construction Industry Federation (CIF)
and the San Diego County Rock Producers Association (SDCRPA) all representing the construction
industry within the San Diego region have representatives on the San Diego Regional Standards
Committee and have participated in the development of the 1994 Regional Standard Drawings and
Specifications which staff is requesting the City Council to adopt. The American Public Works
Association (APW A) and the California Council of Civil Engineers and Land Surveyors also has
representatives on the San Diego Regional Standards Committee.
The revisions to the "Department of Public Works Design Standards - Construction Standards" are
minor with the exception of CVCS No. I, Driveway approach with monolithic curb, gutter, and
sidewalk. evcs No. I was revised to comply with ADA requirements. This revised standard has
been reviewed by, and discussed with, the local developers. It differs from the Regional Standard
drawing by not requiring as much area be devoted to sidewalk and minimizing the amount of
concrete within the parkways. The other drawings were revised basically to correct references listed
on the drawings and to put them into computer format. A copy of drawing evcs No. I is included
as Attachment B for Council's information.
The Director of Public works will have copies of the material recommended for adoption and
summaries of the revisions to the Standard Specifications available for Council viewing in the Public
Works Department. Engineering Division, the office of the City Clerk, and at the Council meeting.
. -
FISCAL IMPACT: The adoption of these revisions will have no fiscal impact other than the costs
to purchase or print the approved documents. These costs, which are estimated to be less than
$1,000, are included as a routine item in the Department's operating budget.
RS:sb
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File No: KY-O22
Is- ~
Minutes
October 24, 1995
Page 6
-
12. RESOLUTION 18086 ADOPTING 1994 STANDARD "GREENBOOK" SPECrnCATIONS, REGIONAL
SUPPLEMENTS AND CHULA VISTA STANDARD DRAWINGS AND STANDARD SPECrnCA TIONS -
On 10/6/92, Council adopted the 1992 Regional Standard Drawings and Standard Specifications for construction
of public works facilities in the city. The Regional Standards Committee has revised the standard tlrawings and
specifications and published the revised 1994 edition. Staff recommends approval of the resolution. (Director of
Public Works) Pulled from the Consent Calendar.
Clifford Swanson, Deputy Director of Public Works/City Engineer, stated in preparing the agenda item staff
believed they had agreement with all of the developers but subsequent to the agenda item going to Council, EastLake
Development questioned Chula Vista Standard Drawing No. 34 - Open Space Wall Location. They indicated they
wanted the entire item pulled in order to review it further. Staff had since discussed it with EastLake and McMillin
and they indicated they did not have a problem with the other design standards or items presented. Therefore, staff
recommended that the item be adopted with the elimination of Chula Vista Standard Drawing No. 34. It was staff's
intentiOD to meet with the developer along with the Parks & Recreation Department to fiod a solution. Staff
anticipated returning to Council with that design standard in approximately 30 days.
Mr. Googins recommended that Resolution 18086 be amended, paragraph 6, to read' oo. with the exception of Chula
Vista Standard Drawing No. 34 pending staff's reevaluation, staff to return as soon as possible with a
recommendation on this item. .
RESOLUTION 18086, AS AMENDED, OFFERED BY COUNCILMEMBER ALEVY, reading of the text was
waived, passed and approved 3"-2 with Horton and Rindone absent. Paragraph 6, to read "oo. with the
exception of Chula Vista Standard Drawing No. 34 pending staff's reevaluation, staff to return as soon as
possible with a recommendation on this item."
. . END OF CONSENT CALENDAR.. -
PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES
NoDe submitted.
ORAL COMMUNICATIONS
. Cindi Binno, 940 Nolan Way, Chula Vista, CA, representing South Bay Pentecostal Church, informed Council
that the Church would be sponsoring the Kids Power Harvest Festival from 5:00 - 8:00 p.m. on October 31st at
the Memorial Bowl. It was not a church fund raiser but an event for the entire community. She asked for any
support the Council, businesses, or community could give.
BOARD AND COMMISSION RECOMMENDATIONS
None submitted.
ACTION ITEMS
13. RESOLUTION 18087 AMENDING THE DRAFT 1995 SPHERE OF INFLUENCE UPDATE STUDY
(PCM 93"5) AND DIRECTING THE AMENDMENTS BE SUBMITTED TO THE LOCAL AGENCY
FORMATION COMMISSION -On 3/14/95, Council approved the 1995 Sphere of Influence Update Study and
directed that the Study be submitted to the Local Agency Formation Commission (LAFCO) for adoption. Staff filed
the Study with LAFCO. In response to special districts and LAFCO comments on the Study, staff is proposing
amendments concerning water service. Staff recommends approval of the resolutioD. (Special Planning Project
Manager, Otay Ranch)
/6',0)
RESOLUTION NO.~
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ADOPTING THE 1997 STANDARD
SPECIFICATIONS FOR PUBLIC WORKS CONSTRUCTION,
"GREENBOOK", REGIONAL SUPPLEMENTS AND STANDARD
DRAWINGS, CHULA VISTA STANDARD DRAWINGS AND
STANDARD PROVISIONS, AND THE STATE OF
CALIFORNIA, DEPARTMENT OF TRANSPORTATION
STANDARD PLANS
WHEREAS, on October 24, 1995, the City Council by
Resolution 18086 adopted the 1994 Standard "Greenbook"
Specifications, Regional Supplements and Standard Drawings, and the
Chula vista Standard Drawings and Standard provisions, excluding
Chula vista Design Standard No. 34; and
WHEREAS, on December 5, 1995, the City Council by
Resolution 18410 adopted the 1995 Supplement to the Greenbook
Standard Specifications for Public Works construction, 1994
Edition; and
WHEREAS, in 1997, the "Standard specifications for Public
Works Construction", commonly known as the "Greenbook" was revised
by established committees representing all facets of the
construction industry and government to reflect changes in
technologies and/or performance tests; and
WHEREAS, the Regional Standards committee (which includes
Chula Vista) has revised the regional standard drawings and
specifications have published the revised 1997 edition; and
WHEREAS, Engineering staff has also revised the city of
Chula vista Standard Special Provisions; city of Chula vista Part
1 Special Provisions-General; and the city of Chula vista
"Department of Public Works Design Standards - Construction
Standards."
NOW, THEREFORE, BE IT RESOLVED the City Council of the
city of Chula vista does hereby adopt the following construction
standards for the city of Chula vista:
1. Standard Specifications for Public Works Construction - 1997
Edition "Greenbook".
2. 1997 Regional Supplement Amendments to Standard Specifications
for Public Works Construction - 1997 Edition (Greenbook
Regional Supplements).
3. San Diego Area Regional Standard Drawings - dated March 1997.
4. city of Chula vista Standard Special provisions - dated July
1997.
1
/31 /10" 10
5. City of Chula Vista Part 1 Special provisions - General with
Revisions.
6. City of Chula vista Department of Public Works Design
Standards - Construction Standards, 1997 edition.
7. State California, Department of Transportation Standard Plans
- dated July 1995.
Presented by Approved as to form by
John P. Lippitt, Director of
Public Works
C:\rs\greenbook
2
Is-'[ \
COUNCIL AGENDA STATEMENT
Itemfl
MeetÚlg DateML2L
ITEM TITLE: Resolution J n'-J-~ Authorizing Submittal of a Request for Soundwall Program
Funding in the 1998 State Transportation Improvements Program for planned
improvements to the I-80S/Orange Avenue interchange and Approving the Third
Amendment to the agreement between the City of Chula Vista and Rick
Engineering Company for preparation of a Noise Barrier Scope Summary Report
(NBSSR) for the I-80S/Orange Avenue interchange and authorizing the Mayor to
execute said agreement on behalf of the City.
SUBMfITED BY, Direaoc or No,. WOrlŒ# ~
REVIEWED BY: City Manager~ ~' (4/5ths Vote: Yes_NoX)
~/
In January of 1996, Council approved an agreem t With Rick Engmeermg to prepare Prehmmary Studies
for interchanges at I-80S and Telegraph Canyon Road, Orange Avenue and Palomar Street. Such studies
are required by CalTrans prior to construction of major projects within CalTrans Right of Way. A second
amendment to the Rick Engineering contract was approved by the City Cottncil in May of 1997 for
additional work required by CalTrans for the I-80S/Telegraph Canyon Road interchange. In February of
1997, CaITrans notified the City of the anticipated funding opportunities for retrofit Soundwall projects
along local freeways. CalTrans' regulations require submittal of a Draft Noise Barrier Scope Summary
Report by July 25, 1997, in order to qualify for consideration in the funding program and a resolution from
the Council authorizing submittal of the request. A third amendment to the agreement with Rick
Engineering is required for work in connection with the Draft Noise Barrier Scope Summary Report
submittal.
RECOMMENDATION: That Council authorize the submittal of a funding request and approve the Third
Amendment of the agreement with Rick Engineering for preparation of a Noise Barrier Scope Summary
Report for the I-80S/Orange Avenue interchange and authorize the Mayor to execute said agreement on
behalf of the City retroactive to June 30, 1997.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION: In February of 1997, CaITrans notified the City of anticipated funding opportunities for
retrofit Soundwall projects along local freeways. City staff initially notified CaITrans staff of the intent
to pursue the Soundwall program funding for the I-80S/Orange Avenue Interchange in May of 1997. In
late June, CaITrans staff requested the City submit a Draft Noise Barrier Scope Summary Report by July
25, 1997, in order to qualify for consideration in the funding program. CalTrans also requires that the City
Council authorize the submittal of the application by resolution.
On January 23, 1996, Council, by Resolution 18193, approved an agreement with Rick Engineering
Company to perfonn Preliminary Engineering Design Studies for interchanges with I-80S at Telegraph
Canyon Road, Orange Avenue and Palomar Street. A second amendment was approved on May 20, 1997.
The proposed third amendment to the contract includes two changes. The changes are an adjustment of
the scope of work and the compensation.
ILf-1
Page 2, Item-
Meeting Date-
The current contract calls for preparation of a combined Project Study Report/Project Report (PSRlPR)
for the I-80S/Orange Avenue interchange. The preparation of a separate Noise Barrier Scope Summary
Report (MBSSR) is required in order to pursue soundwall program funding in the 1998 State
Transportation Improvement Program. While much of the information required for a NBSSR is being
developed for the PSR/PR, an additional level of documentation is required.
The second amendment includes both an adjustment of the detailed scope of work and the compensation
to address the preparation of an NBSSR for the above improvements. The current contract amount of
$648,390 would be increased by $6,000 as a result of the third amendment.
The contract amendment is requested to be retroactive to June 30, 1997, because notice of the July 25,
1997 deadline for submittal of the Noise Barrier Scope Summary Report (NBSSR) was not provided by
CalTrans until late June. Subsequent discussions with CaITrans were required to determine the level of
effort required to prepare the NBSSR and whether an amendment to the Rick contract would be required.
By the time this issue was resolved with CaITrans in early July, there was not sufficient time to wait to
initiate preparation of the NBSSR until after the contract amendment was approved by the City Council
and still meet the CalTrans' soundwall program funding deadlines. In the future staff will send Council
an informational memorandum if this type of situation arises again.
The proposed soundwalls will be constructed in conjunction with the proposed expansion of the 1-
80S/Orange Avenue interchange and are required as a environmental noise mitigation measure. The
proposed sound walls include a total of approximately 2,290 meters of soundwall (7,511 lineal feet) along
both sides of the freeway both north and south of Orange Avenue. This ranges from a low of 370 meters
(1,213 lineal feet) of sound wall on the south bound freeway north of Orange Avenue to 940 meters (3,083
feet) along the northbound freeway right of way south of Orange A venue. The very preliminary estimated
cost of the proposed soundwalls is $2,500,000. Under the CaITrans' soundwall retrofit program 2/3 the
cost of the soundwalls would be paid for by CaITrans. Thus, the cost of the I-80S/Orange Avenue
Interchange Transportation Development Impact Fee (TDIF) project would be reimbursed $1,667,000 to
the City's TDIF fund lowering the overall cost to the City and the developers if CaITrans approves our
request.
FISCAL IMPACT: $550,000 was appropriated for this project as STM327 in account number 621-
6210 (TDIF Fund). Of that amount, $503,120 was allotted for Rick Engineering and the remainder to
cover staff time. A total of $145,270 was allocated for the compensation adjustment for Amendment Two,
bringing the contract total to $648,390. An additional $6,000 will be allocated for Amendment Three.
CIP project number STM327 includes sufficient urtallocated funds to cover this amendment. All costs
associated with this project are from the TDIF program. The TDIF fund would be reimbursed for 2/3 the
cost of the sound walls. A preliminary estimate of that amount is $1,667,000.
Attachments:
Exhibit A - Letter from CaITrans NOT SCANNED
File: 0735-IO-STM327
0735-IO-STM328
H: IHOMEIENGINEERIAGENDA IRICKA85. CLS
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STATE OF CALIFORNIA. BUSINESS, TRANSPORTATION AND HOUSING AGENCY PETE WILSON, Governor
DEPARTMENT OF TRANSPORTATION EXHIBIT A
DISTRICT 11, P.O. BOX 85406. SAN DIEGO ."."8406
(619) 6aa-666a
June 18, 1997
John Lippit
Director of Public Works
City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91910
Dear Mr, Lippit:
I am writing as a follow-up to letters sent to the City on December 3, 1996 and
February 5, 1997, regarding anticipated funding opportunities for retrofit soundwall projects
along local freeways, As announced in the letters, Noise Barrier Scope Summary Reports
(NBSSRs) are currently being solicited from local agencies for candidate projects to be
included in the Statewide Priority List and submitted for funding in the 1998 State
Transportation Improvement Program (STIP). Projects which have a local agency
contribution of at least thirty-three percent (33 %) will have an "enhanced priority" above all
other projects. The original due date for submittal of the final NBSSRs has now been deferred
until mid-August.
We understand from discussions with Cliff Swanson, Chula Vista City Engineer, that
the City will be preparing NBSSRs for soundwall projects along Interstate 805 between atay
Valley Road and Telegraph Canyon Road and submitting them as candidates for the Statewide
Priority List. Also, that several of these soundwall projects will include a commitment of
33% local funding thereby qualifying for the "Tier II" funding priority level. We are
requesting that final submittal of these NBSSRs include a "resolution" from the City
establishing an intent to fund 33% of the project cost. To meet our schedule for approving the
final NBSSRs, we would like to receive a draft by July 25th and a final by August 18th.
Soundwall projects with completed NBSSRs but without City matching funds will be
submitted for the lower priority "Tier V Funding",
If you need additional information, please call Richard Grob, Environmental Branch
Chief, at 688-3377.
Sincerely,
~
c:Cliff Swanson, City Engineer
Shirley Horton, Mayor of Chula Vista
lY-----3
nURD AMENDMENT TO AGREEMENT BETWEEN
CITY OF CHULA VISTA AND RICK ENGINEERING COMPANY
FOR PRELIMINARY ENGINEERING DESIGN SERVICES
FOR THREE INTERCHANGES WITH I-80S
AT TELEGRAPH CANYON ROAD, ORANGE A VENUE AND PALOMAR STREET
TIllS TIllRD AMENDMENT TO THE AGREEMENT FOR PRELIMINARY DESIGN SERVICES
APPROVED BY RESOLUTION 18193 (AMENDMENT) is entered into as of August 5, 1997, by and
between the City ofChula Vista (CITY) a municipal chartered corporation of the State of California, and Rick
Engineering Company (CONSULTANT), whose place of business and telephone numbers are set forth on
Exhibit A, Paragraph 6.
RECITALS:
WHEREAS, the City ofChula Vista has approved an agreement with Rick Engineering Company dated
January 23,1996 and approved by Resolution 18193 (Agreement); and
WHEREAS, CITY has been notified by Caltrans of anticipated funding opportunities for retrofit soundwall
projects along local fTeeways; and
WHEREAS, preliminary engineering studies for the I-80S/Orange Avenue interchange have detennined that
installation of soundwalls are likely to be required; and
WHEREAS, the soundwall funding program in the 1998 State Transportation Improvement Program could
provide 67% of the cost of installing new soundwalls; and
WHEREAS, CITY was notified by Caltrans that the preparation and submittal of a Noise Barrier Scope
Summary Report is required to qualify as a candidate project for the soundwall funding program; and
WHEREAS, CITY was notified by Caltrans in late June that the deadline for submitting a Noise Barrier Scope
Summary Report if July 25, 1997; and
WHEREAS, both CITY and CONSULTANT desire to amend the Agreement approved by Resolution 18 I 93
to revise the scope of work to include additional items required to compete for funds from the soundwall
program.
Rick Engineering Exhibit A
July 24, 1997 Page 1
/I~;s /L4~L{
NOW, TIffiREFORE, Exhibit A ofthe Agreement is hereby amended to read as follows:
A. Amend 8A, Detailed Scope of Work as follows:
Orange Avenue
Phase 6 (Project Study Report/Project Report for East Orange Avenue)
Prepare Noise Barrier Scope Summary Report (NBSSR) per Caltrans Project Development Procedures
Manual guidelines with data available from ongoing project. A Draft NBSSR shall be submitted to
Caltrans no later than July 25, 1997, and a Final NBSSR no later than August 18, 1997.
B. Amend lIB Fixed Fee Arrangement as follows.
The fee for Phase 6 is amended from $104,720 to $110,720.
C. Except as modified herein, all other provisions of the Agreement approved by Resolution 18193 on
January 23, 1996, shall remain in full force and effect.
End of Agreement
Signature Page Follows
Rick Engineering Exhibit A
July 24, 1997 Page 2
\Lj/$"
,
Signature Page
for the Third Amendment to
Agreement between City of Chula Vista and Rick Engineering Company
for Preliminary Engineering Design Services
For Three Interchanges With 1-805
At Telegraph Canyon Road, Orange Avenue and Palomar Street
IN WITNESS WHEREOF, CITY AND CONSULTANT have executed this Third Amendment
thereby indicating that they have read and understood same, and indicate their full and complete consent to
its terms:
City ofChula Vista Rick Engineering Company
Dated: ,1997 Dated: vVi.-'-( vr ,1997
By: By: % ¿--
Shirley Horton, Mayor Kai Ramer, Associate
Attest:
Beverly Authelet, City Clerk
Approved as to form:
Rick Engineering Exhibit A
July 24, 1997 Page 3
\<-\ -~
RESOLUTION NO.1t1=ti
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AUTHORIZING SUBMITTAL OF A REQUEST
FOR SOUNDWALL PROGRAM FUNDING IN THE 1998
STATE TRANSPORTATION IMPROVEMENTS PROGRAM FOR
PLANNED IMPROVEMENTS TO THE I-805/0RANGE
AVENUE INTERCHANGE AND APPROVING THE THIRD
AMENDMENT TO THE AGREEMENT BETWEEN THE CITY OF
CHULA VISTA AND RICK ENGINEERING COMPANY FOR
PREPARATION OF A NOISE BARRIER SCOPE SUMMARY
REPORT (NBSSR) FOR THE I-805/0RANGE AVENUE
INTERCHANGE AND AUTHORIZING THE MAYOR TO
EXECUTE SAID AGREEMENT ON BEHALF OF THE CITY
WHEREAS, in January of 1996, Council approved an
agreement with Rick Engineering to prepare Preliminary studies for
interchanges at 1-805 and Telegraph Canyon Road, Orange Avenue and
Palomar Street which studies are required by CalTrans prior to
construction of major projects within CalTrans Right of Way; and
WHEREAS, a second amendment to the Rick Engineering
contract was approved by the city Council in May of 1997 for
additional work required by CalTrans for the I-805/Telegraph Canyon
Road interchange; and
WHEREAS, in February of 1997, CalTrans notified the City
of the anticipated funding opportunities for retrofit Soundwall
projects along local freeways; and
WHEREAS, CalTrans' regulations require submittal of a
Draft Noise Barrier Scope Summary Report by July 25,1997, in order
to qualify for consideration in the funding program and a
resolution from the Council authorizing submittal of the request;
and
WHEREAS, a third amendment to the agreement with Rick
Engineering is required for work in connection with the Draft Noise
Barrier scope summary Report submittal.
NOW, THEREFORE, BE IT RESOLVED the city Council of the
City of Chula vista does hereby authorize submittal of a request
for Soundwall Program Funding in the 1998 State Transportation
Improvements Program for planned improvements to the I-805/0range
Avenue interchange. .
BE IT FURTHER RESOLVED that the City Council does hereby
approved the Third Amendment to the Agreement between the City of
Chula vista and Rick Engineering company for preparation of a Noise
Barrier Scope Summary Report (NBSSR) for the I-805/0range Avenue
1
\L\--I
interchange, a copy of which is on file in the office of the city
Clerk as Document No.
BE IT FURTHER RESOLVED that the Mayor of the city of
Chula vista is hereby authorized and directed to execute said Third
Amendment for and on behalf of the City of Chula vista.
Presented by Approved as to form by
John P. Lippitt, Director of torney
Public Works
c: Irslnbssr. ric
2
14- ~
COUNCIL AGENDA STATEMENT
ITEM / s:
MEETING DATE:~
ITEM TITLE: Report on the Chula Vista Public Library's Application for Library Services and
Technology Act (LSTA) Virtual Reference Network grant funds for FY 1997-98
SUBMITTED BY: Lilirnry n~ ~
REvŒWED BY: ChyM_-JG¡ ~ -----
(4/5th Vote: Yes_No...x.)
On July 14, 1997 the Chula Vista Public Library submitted an application for $231,563 in Federal LSTA
funds for equipment, staffing and materials to create (in partnership with the National City Public Library)
an Internet-based health reference product directed toward Hispanic women, ages 18-35.
This grant will implement a new phase of a California State Library project, originally entitled "Healthy
BabylHealthy Mom". Developed by the State Library and Triadigm Technologies, with advisory assistance
ITom the Chula Vista and National City Public Libraries, this product is currently a stand-alone computer
workstation mounted with health related infonnation for Hispanic Women in text, graphic and audio/visual
formats. This product has been tested at the Civic CenterlMain, South Chula Vista and National City
Public Libraries.
In an highly unusual move, the California State Library specifically invited the two libraries to apply for
this grant out of sequence in order to migrate the "Healthy BabylHealthy Mom" project ITom a stand-alone
computer product to a online, collaboratively built database, with local content, available via the World
Wide Web.
RECOMMENDATION: That Council Accept the Report and ratify the application for $231,563 in
LSTA funding for the Virtual Reference Network Project.
BOARD/COMMISSION RECOMMENDATION: The Library Board voted to support the Library's
application for FY 1997-98 LSTA grant funds at their meeting ofJuly 23, 1997. (ATTACHMENT A)
DISCUSSION:
Approximately two years ago the California State Library selected Chula Vista and National City Public
Libraries as demonstration sites for the development of a VIrtual Reference Workstation in conjunction with
its Ethnic Resource Centers Project A consultant from the State Library facilitated focus group sessions
with library staff members and representatives of community groups in the South Bay and as a result it was
decided that the prototype would deliver health information to Hispanic women with lower reading skills
in English and Spanish. One of the primary objectives of the project was to have the workstations
Is---\
Item , Page 2
Meeting Date 8/5/97
incorporate text, graphics, video and audio. In 1996, the State Library hired Triadigm Technology, a leader
in the field of video encryption, to actually develop the prototype workstation. Among the critical
components were:
* a presentation combining the power of video, images and sound
* Spanish and English narration to overcome the need for print literacy
* accessibility and an intuitive interface
* the ability to create/maintain/expand information content at the local library level and distribute
the information via the World Wide Web
The prototype was delivered to Chula Vista and National City in mid-year and for the most part met the
first three objectives. The California State Library is now greatly interested in continuing the project in
order to meet the fourth objective (expanded/local content and Internet access). The State Library has
identified the newly enacted Library Services and Technology Act as a funding source and invited Chula
Vista and National City to prepare an application. Chula Vista has agreed to serve as the fiscal agent for
the one year project.
The aims of the grant project, as outlined in the application, are to:
* expand and enhance the content of the Virtual Reference Workstation prototype, which
presently offers only cursory health information on a limited number of topics.
* extend the availability of information by migrating the product ftom a stand-alone
configuration to an Internet work environment, extending the utility of the product
* reduce the on going cost of the product by converting the existing electronic database
ftom a proprietary format to one that uses the Internet standards and development tools
* provide the participating libraries with training needed.to develop additional content at the
local level
* contribute to the California State Library's goal of meeting sophisticated and diverse
information needs through the use of affordable and widely available technology
The Chula Vista Public Library and the City of Chula Vista will also reap considerable benefits through:
* the acquisition of equipment which will allow our other databases, such as the catalog, to
be made accessible via the World Wide Web. The ability to offer home, school, and
business access to the catalog has long been a major Library priority.
* extensive training of library staff to implement future service enhancements.
* the prestige this should bring to both the Library and the City because ofthe"cutting edge"
technology and collaborative nature of the project
* improved information services to a significant clientele group
* the implementation of one more element of the SmartCommunity plan.
I~')..
Item , Page 3
Meeting Date ~
As mentioned above, the State Library's involvement in this particular grant process is highly unusual.
Although the State Library has administered the development of this prototype up to this point, they are
now looking at a paradigm shift. The State Library's over arching goal is to create a model that can be
replicated in the development of future Asian, African-American, Native-American and other ethnic
VIrtual Reference Networks. The State Library realizes that it is neither feasible nor practical for that
agency to be solely responsible for the creation, of what will be eventually dozens, of similar networks.
Therefore, through this grant the State Library will detennine whether local public libraries (home of the
actual users of these future systems) can successfully create, maintain and manage the Virtual Reference
Networks. This project is indicative of the massive shift to come in the role oflibrarians and libraries
as a result of the current technological revolution. Chula Vista and National City Public Libraries have
been honored by State Library's confidence in our abilities to manage this project.
FISCAL IMPACT: If the grant funds are awarded, $231,563 will be received to implement this
partnership program (with National City Public Library and Triadigm Technologies) through the Chula
Vista Public Library. Chula Vista will serve as the fiscal agent. Grant funds will be used to hire a 1.0
FTE temporary professional expert (Web Services Coordinator) to train staff at both Chula Vista and
National City on Web page creation; write procedures and guidelines; identifY new Web content and
network with local health and social service agencies. The grant will also require contracting with
Triadigm Technologies to continue their work on the development of the prototype platfonn. This sole
source was required by the California State Library due to that finn's considerable technical expertise
and their previous work on the project.
I S;"S
ATTACHMENT A
Draft Minutes
Library Board of Trustees 2 July 23, 1997
B. LSTA Grant Application
Director Palmer reported that the Chula Vista Public Library has been invited by
the State Library to apply for this joint project with the National City Public
Library for a 1997 Library Services and Technology Act (LSTA) Grant in the
amount of $231,563. The project continues the Healthy Baby/Healthy Mom stand
alone system created with the assistance of the Chula Vista and National City
Libraries. This project would move the information to an internet-based shared
colaboratively built data base. The State Library hopes to use this work as a
model for future ethnic services resources.
The grant would provide funding for equipment, staffing and materials to create an
Internet-based health reference product directed toward Hispanic women, ages 18-
35. The project would also set the foundation for the creation of other library-
created databases that could be accessed via the World Wide Web. Chula Vista
would act as fiscal agent for the grant. An employee would be hired to help put
this material on line. Chula Vista will be able to obtain equipment that would
allow us to place the catalog available on the World Wide Web.
MSUC (AlexanderNaidovinos) to support the Library's application for this grant.
IS;-c.f
COUNCIL AGENDA STATEMENT
Item ~
Meeting Date 8/5/97
ITEM TITLE: Public Hearing: PCA-97-05; Consideration of amendment to Sections
19.22.170 and 19.64.180 of the Municipal Code to allow building
additions on residential lots containing an existing residence to maintain
existing sideyard setbacks-City Initiated.
Ordinanceà111 Amending Sections 19.22.170 and 19.64.180 of the
Moo'oi", Coo, ,,""og ~'" .id, YM' ""=,,, ro, ",,""om"
~i"i"g ',,"<ore,. ;¡!
SUBMITTED BY: Director of Planning . '
REVIEWED BY: City ManagerJ~ ~ ~ (4/5ths Vote: Yes_No--X.)
Since 1969, when the required residential sideyard setbacks changed from requiring 5 feet on
each side to requiring a minimum of 10 feet on one side and 3 feet on the other, there have been
numerous occasions where a property owner wishing to add a building addition to the existing
residence was not allowed to place the addition in line with the plane of the existing residence
since it did not meet the current required sideyard setbacks. The applicant/owner was advised
that the only exception which could take place was if they were successful in obtaining a
variance. This City-initiated proposal is to amend section 19.22.170 of the Municipal Code for
residential lots containing an existing residence to maintain existing side yard setbacks for
replacements and/or additions. This provision will not apply to existing lots which are less than
60 feet wide at front setback line as such lots are already covered under the provisions of section
19.24.070(c) of the Municipal code (which allows them to maintain 5'/5' setbacks).
The Environmental Review Coordinator has determined that, as a procedural amendment, the
project is exempt from the California Environmental Quality Act (CEQA) under the General
Rule exemption section 15061(b)(3).
RECOMMENDATION: Adopt the ordinance amending Sections 19.22.170 and 19.64.180
of the Municipal Code relating to required side yard setbacks for additions to existing residences.
BOARDS/COMMISSIONS RECOMMENDATION:
The Planning Commission considered this proposal on June II, 1997 and voted 6 to 0 (with one
Commissioner absent) to approve a resolution recommending that the City Council amend the
Zoning Ordinance.
H,'
Page 2, Item-
Meeting Date 8/5/97
After the Planning Commission action and in working with the City Attorneys office, there were
minor adjustments to the proposed language of the text amendment referred to in Exhibit A.
These minor changes do no affect the context of the proposed amendment. These minor
adjustments will be reported back to the Planning Commission after City Council action.
DISCUSSION:
Current Situation:
Expansion of existing residential homes on lots 60 feet in width or greater are required to
maintain a side yard setback of 10' on one side even if the existing house is set closer than 10'
to the side yard.
Proposal:
The proposed modification would allow building additions to adhere to the same setback enjoyed
by the existing house, but no closer than 5' to the side property line with a minimum 10'
separation from any adjacent residence.
Proposed text modification
The existing section 19.22.170 and 19.64.180 are proposed to be modified as follows:
Section 19.22.170 Building Additions
A. Additions, greater than 50%. If an addition to a legal existing dwelling unit
constitutes an increase of 50% or more of the floor area of the original buildings's square
footage, the existing building, including the addition, shall comply with current zoning
ordinance standards, except for the current building setback standards which would only
apply to the new addition.
B. Additions, less than 50%. If an addition to a legal existing dwelling unit constitutes
less than 50% of the floor area of the original building's square footage, the existing
building may be expanded or altered along the existing horizontal sideyard plane
provided all of the following criteria area met:
I. The proposed addition is located on a lot that is 60 feet wide or greater at the
front setback line; and
2. The proposed addition maintains a minimum five foot setback from the side
property line; and
3. There is a minimum 10 fool separation between the horizontal building plane
L (p - ;;}..
Page 3, Item-
Meeting Date 8/5/97
of the existing dwelling unit and the addition and the horizontal building plane of
an existing residence on an adjacent lot; and
4. There is a minimum 6 foot separation between the edge of the proposed
addition and any accessory building on-site or on an adjacent property.
c. Verification Square Footage. For purposes of Section 19.22.170, the original
dwelling unit's square footage shall be determined by a dimensioned floor plan
and site plan submitted by the applicant to the Director of Planning for review
and verification.
Section 19.64.180 Uses not conforming to setback or height requirements-alteration or
enlargement permitted when.
Any structure that is nonconforming because of setback or height requirements may be
altered and/or enlarged by approval of the zoning administrator on the basis that such
alteration and/or enlargement shall conform to the regulations herein except as provided
for in Section 19.22.170.
Staff Analysis:
One of the primary reasons for the change in required residential side yard setbacks from 5' /5'
to 10' / 3' back in 1969 was to establish at least one generous side yard which would provide for
an opportunity to have vehicular access to the rear yard which was once provided by alleys. As
a result of these new 10' /3' sideyard setback requirements, there are many dwellings constructed
in the City prior to 1969 which do not conform with the present setback standards. While
residential lots which are less than 60 feet wide at front setback line are governed by section
19.24.070(c) of the Municipal Code (which requires that remodels/additions only have to meet
5 foot side yard setbacks), there is no such provision for existing developed lots which are 60
feet wide or greater. Currently building additions on such lots must comply with the current
sideyard setback requirements. This results in a hardship in terms of not being able to expand
the dwelling in a manner consistent with an existing floor plan. In addition, due to the previous
development of the site under previous setback requirements, no vehicular access could take
place to the rear of the property, which is the primary purpose of the 3' /10' setback requirement
(see exhibit-example).
At the present time, the only way to allow a reduction in the current setbacks is for the
owner/applicant to request a Variance for setback reduction. Staff has consistently approved such
requests since an existing hardship is present due to the fact that the property was developed
according to previous setback requirements.
1£0,3
Page 4, Item-
Meeting Date~
Conclusion:
For the above mentioned reasons and because of the increased frequency of these occurrences,
cost and time to the applicant, and staff time to process the Variance applications, staff
recommends approval of the proposed text amendment.
FISCAL IMPACT:
This proposed amendment would have a potentially minimal fiscal impact due to decrease in
variance applications related to sideyard setbacks.
Attachments
1. Council Ordinance
2. Draft Planning Commission Minutes and Unsigned Resolution NOT SCANNED
3. Example of a proposed addition to an existing residence
H, IHO MEIPLANN1NGIIEFFICCRPT\SID EY ARD .NEW
luly 29, 1997 (4,18pm)
11o--Y-
EXHIBIT A
Section 19.22.170 Building Additions and Remodeling
A. Any remodeling or additions to existing dwellings, which when added to the original
square footage equals 50% or greater than the original building permit allowed, shall
require the building to comply with current' zoning ordinance standards. Current
building setbacks shall, however, apply only to new additions to an existing dwelling~
below for additions of less than 50% on lots that are 60 feet wide or I!reater at front
setback line). Original building square footage shall be determined by submittal of
dimensioned floor and site plans by the applicant, which are subject to review by the
Director of Planning for verification.
.Ii. Buildinl! additions on residential lots containinl! an existinl! residence may maintain
sidevard setbacks previously established by a lel!allv constructed existing residence
Drovided all of the followinl! criteria are met:
1.. The proposed addition constitutes less than 50% of the floor area of the original
building square footage.
~ The proposed addition maintains a minimum five foot setback from the side
DroDertv line.
1c There is a minimum 10 foot separation between the horizontal buildinl! Diane of
the existing residence and addition and the horizontal buildinl! Diane of an existing
adiacent residence.
1:... There is a minimum 6 foot separation between the horizontal buildinl! Diane of
the DroDosed addition and any adiacent accessory building.
Section 19.64.180 Uses not conforming to setback or height requirements-alteration or
enlargement permitted when.
Any structure that is nonconforming because of setback or height requirements may be
altered and/or enlarged by approval of the zoning administrator on the basis that such
alteration and/or enlargement shall conform to the regulations herein except as provided
for in section 19.22.170.
I b-'5
ORDINANCE NO.~
AN ORDINANCE OF THE CITY OF CHULA VISTA
AMENDING SECTIONS 19.22.170 AND 19.64.180 OF
THE MUNICIPAL CODE RELATING TO REQUIRED
SIDEYARD SETBACKS FOR ADDITIONS TO EXISTING
RESIDENCES
WHEREAS, the City has initiated a request to amend the
Municipal Code to allow additions to existing residential units on
lots 60 feet or wider measured at front setback line to be built
along the same plane of the existing residence even if not meeting
the current sideyard setbacks, and
WHEREAS, allowing the proposed additions along the same
plane as the existing house will not affect the intent of the
current sideyard setbacks to allow for access to the rear of the
housing since such access would have already been precluded by the
location of the existing residence, and
WHEREAS, these provisions shall not apply to residential
lots which are less than 60 feet wide at the front yard setback
line, and
WHEREAS, on June 11, 1997, the city Planning commission
voted 6-0-1 to recommend that the City council approve the
Ordinance in accordance with Resolution PCA 97-03; and
WHEREAS, the city Clerk set the time and place for a
hearing on said Municipal Code amendment application and notice of
said hearing, together with its purpose, was given by its
publication in a newspaper of general circulation in the city and
its mailing to property owners within 500 feet of the exterior
boundaries of the property at least ten days prior to the hearing;
and
WHEREAS, the hearing was held at the time and place as
advertised, namely August 5, 1997 at 7:00 p.m. in the Council
Chambers, 276 Fourth Avenue, before the city council and said
hearing was thereafter closed.
The City Council of the city of Chula vista does ordain
as follows:
SECTION I: That Section 19.22.170 of the Chula vista
Municipal Code is hereby amended to read as follows:
19.22.170 Building Additions and Remodeling.
'-.ny Femeàelißg or aàài tiona te e¡¡ioting èMellinga, ,,¡'liaa '\Iacn
aàdcd to the eriginal eailàing aquare footagc e~aals 50~ or ~reater
taaß the ori~ißal builàÜ!~ peFmit alle\;eà, GRall re~uirc thc
building te comply \;ita currcßt Beßing oràißaßcc ataßàarào.
J~-\P
CürreRt 19uilàiREj setl9aeJ( staRàaràs shall, hm.'C'.rer, apply oRly to
Re" aààitioRs te aR mristiREj à\1elliREj. oriEjiRal 19ailàiREj square
footaEje shall 1ge àetermiReà 19y sul9mittal of àimeRsioReà floeL aRà
site plaRs 19y the applicaRt, \.hich aLe subject to revim.. 19y the
Directer of PlaRRiREj fer vcrifieatioR.
fu Additions. qreater than 50%. If an addition to a leqal
existinq dwellinq unit constitutes an increases of 50% or more
of the floor area of the oriqinal buildinq's square footaqe.
the existinq buildinq. includinq the addition. shall complY
with current zoninq ordinance standards. except for the
current buildinq setback standards which would onlY applY to
the addition.
!.L.- Additions. less than 50%. If an addition to a leqal existinq
dwellinq unit constitutes less than 50% of the floor area of
the oriqinal buildinq's square footaqe. the existinq buildinq
may be expanded or altered alonq the existinq horizontal
sideyard buildinq plane proyided all of the followinq criteria
are met:
.L.. The proposed addition is located on a lot that is 60 feet
wide or qreater at the front setback line: and
£... The proposed addition maintains a minimum five foot
setback from the side property line: and
2... There is a minimum 10 foot separation between the
horizontal buildinq plane of the existinq dwellinq unit
and the addition and the horizontal buildinq plane of an
existinq residence on an adiacent lot: and
h There is a minimum 6 foot separation between the edqe of
the proposed addition and any accessory buildinq on-site
or on an adiacent property.
Q... Verification Square Footaqe. For purposes of section
19.22.170. the oriqinal dwellinq unit's square footaqe shall
be determined bv a dimensioned floor and site plan submitted
by the applicant to the Director of Planninq for review and
verification.
SECTION II: That section 19.64.180 of the Chula Vista
Municipal Code is hereby amended to read as follows:
19.64.180 Uses not conforming to setback or height requirements-
Alteration or enlargement permitted when.
Any structure that is nonconforming because of setback or
height requirements may be altered and/or enlarged by approval of
the zoning administrator on the basis that such alteration and/or
enlargement shall conform to the regulation herein except as
provided for in Section 19.22.170.
I ~,.l
SECTION III: This ordinance shall take effect and be in full
force and effect on the thirtieth day from and after its second
reading and adoption.
Presented by Approved as to form by
CL-- ~~ ~
Robert A. Leiter, Director of John M. Kaheny, C1ty Attorney
Planning
C:\or\1922170
llo~9
PC Minutes -2- June 11, 1997
ITEM 2. PUBUC HEARING; PCA-97-05; CONSIDERATION OF AMENDMENT TO
SECTIONS 19.22.170 AND 19.64.180 OF TIIE MUNICIPAL CODE TO
ALLOW BUll.DING ADDITIONS ON RESIDENTIAL LOTS CONTAINING
AN EXISTING RESIDENCE TO MAINTAIN EXISTING SIDEYARD
SETBACKS - City Initiated
Assistant Planner Steichen presented the staff report, noting that the proposed amendment would
only apply to residential lots which were 60 feet wide as measured from the front setback line.
There had been numerous occasions where property owners wishing to add a building addition
to the existing residence was not allowed to place the addition in line with the plane of the
existing residence, since it did not meet the required side yard setbacks, and the only procedure
the applicant could take was to request a variance. At the present time, variances relating to
side yard setback reductions which are consistent with the proposed amendment are routinely
approved by the department, thus an ordinance amendment would eliminate the need for variance
requests. Because of the increased frequency of these occurrences, cost, and time for the
applicant and staff time to process the variance application, staff recommended approval of the
proposed text amendment.
Commissioner Willett complimented staff on the report.
Commissioner Thomas questioned the number of projects that would be impacted during a year.
Mr. Lee replied that it averaged betWeen four and six projects a year. It was not astronomical,
but still substantial, and a burden not only on the applicant but also on staff. He noted that
when there were variances that were frequently granted, it was time to examine the ordinance
and see if it needed updating.
Commissioner Aguilar was glad to see that the City assessed policies and requirements from
time to time to see if they were still appropriate.
Commissioner Ray asked if the amendment only applied to existing property and not to new
development and if there would still be 10 feet betWeen dwellings. Mr. Steichen answered
affmnatively to both.
This being the time and the place as advertised, the public hearing was opened. No one wishing
to speak, the public hearing was closed.
MSUC (ThomaslWillett) 6-0 (Davis excused) to recommend that the City Council adopt an
ordinance to amend Sections 19.22.170 of the Municipal Code relating to required side yard
setbacks for additions to existing residences.
I b --~
RESOLUTION NO. PCA-97-05
RESOLUTION OF THE CITY OF CHULA VISTA PLANNING COMMISSION
RECOMMENDING THE CITY COUNCIL ADOPT AN ORDINANCE TO AMEND
SECTIONS 19.22.170 AND 19.64.180 THE MUNICIPAL CODE RELATING TO
ADDITIONS TO RESIDENCES WHICH ARE NON-CONFORMING DUE TO
SIDEY ARD SETBACKS.
WHEREAS, the current Zoning Ordinance requires building additions to existing
residential dwelling units which are nonconforming due to current setbacks on lots which are
greater than 60 feet at the front setback line to be constructed to meet current sideyard setback
requirements, and
WHEREAS, there have been numerous requests from the public to construct additions
along the same plane as the existing residence, and
WHEREAS, requiring the owner of property to comply with current sideyard setbacks
for additions to existing residential structures which are nonconforming in terms of current
sideyard setback requirements, causes an undue hardship on the owner who is precluded from
expanding a nonconforming dwelling in a manner consistent with an existing floor plan and
plumbing layout, and
WHEREAS, the City has initiated a request to amend the Municipal Code to allow
additions to existing residential units on lots 60 feet or wider measured at front setback line to
be built along the same plane of the existing residence even if not meeting the current sideyard
setbacks, and
WHEREAS, allowing the proposed additions along the same plane as the existing house
will not affect the intent of the current sideyard setbacks to allow for access to the rear of the
housing since such access would have already been precluded by the location of the existing
residence, and
WHEREAS, these provisions shall not apply to residential lots which are less than 60 feet
wide at the front yard setback line, and
WHEREAS, the Planning Commission set the time and place for a hearing on said
amendment and notice of said hearing, together with its purpose, was given by its publication
in a newspaper of general circulation in the city at least ten days prior to the hearing, and
WHEREAS, the hearing was held at the time and place as advertised, namely June 11,
1997, at 7:00 p.m. in the Council Chambers, 276 Fourth Avenue, before the Planning
Commission and said hearing was thereafter closed, and
I fo//O
WHEREAS, the Commission found that the proposal, as a procedural amendment, is
exempt from environmental review and is not subject to CEQA.
NOW, THEREFORE, BE IT RESOLVED THAT FROM THE FACTS PRESENTED
AT THE HEARING, THE PLANNING COMMISSION recommends that the City Council
amend Section 19.22.170 of the Municipal Code to allow for the expansion of an existing
residence along same plane of the building as shown on Exhibit "A".
BE IT FURTHER RESOLVED THAT a copy of this resolution be transmitted to the
City Council.
PASSED AND APPROVED BY THE PLANNING COMMISSION OF CHULA VISTA,
CALIFORNIA, this 11 day of June by the following vote, to-wit:
A YES: Chair Tarantino, Commissioners Aguilar, O'Neill, Ray, Thomas, Willett
NOES: None
ABSENT: Commissioner Davis
ABSTENTIONS: None
Frank A. Tarantino, Chairman
Nancy Ripley, Secretary
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MAILED NOTICES TO PROPERTY OWNERS ~ NO. MAILED -
PER GC §54992 Legislative Staff, Construction Industry Fed, 6336 Greenwich Dr Suite F. San Diego, 92122
LOGGED IN AGENDA BOOK 7~19?
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NOTICE OF PUBLIC HEARING
BY THE CITY COUNCIL OF
CHULA VISTA, CALIFORNIA
NOTICE IS HEREBY GIVEN THAT A PUBLIC HEARING will be held by the City Council
of Chula Vista, California, for the purpose of considering an amendment to Title 19 of the
Municipal Code Sections 19.22.170 and 19.64.180, to allow building additions on residential lots
containing an existing residence to maintain sideyard setbacks previously established by the
existing residence. Documents are on file in the office of the Planning Department.
The Environmental Review Coordinator has determined that, as a procedural amendment, the
project is exempt from the California Environmental Quality Act (CEQA) under the General Rule
Exemption section 15061(b)(3).
Please direct any questions or comments to Project Planner Jeff Steichen in the Planning
Department, Public Services Building, Chub Vista Civic Center, 276 Fourth Avenue, Chula
Vista, California 91910, or by calling 691-51Ol.
If you wish to challenge the City's action on this matter, you may be limited to raising omy those
issues you or someone else raised at the public hearing described in this notice, or in written
correspondence delivered to the City Clerk at or prior to the public hearing.
SAID PUBLIC HEARING will be held by the City Council on Tuesday, August 5,1997 at
4:00 p.m. in the Council Chambers, Public Services Building, 276 Fourth Avenue, at which
time any person desiring to be heard may appear.
Date: May 28, 1997
Case Number: PCA 97-05
H,...jempub"oÜ,',;dey"d
NOTICE OF PUBLIC HEARING
BY THE CHULA VISTA CITY COUNCIL
CHULA VISTA, CALIFORNIA
NOTICE IS HEREBY GIVEN THAT THE CHULA VISTA CITY COUNCIL will hold
a public hearing to consider the following:
An amendment to Municipal Code Sections 19.22.170 and 19.64.180, to allow
building additions on residential lots containing an existing residence to maintain
sideyard setbacks previously established by the existing residence. For further
information call Jeff Steichen in the Planning Department at G91-510J.
Any petitions to be submitted to the City Council must be received by the City Clerk's office
no later than noon of the hearing date.
If you wish to challenge the City's action on these matters in court, you may be limited to
raising only those issues you or someone else raised at the public hearing described in this
notice, or in written correspondence delivered to the City Clerk's Office at or prior to the
public hearing,
SAID PUBLIC HEARING WILL BE HELD BY THE CITY COUNCIL on Tuesday,
August 5,1997, at 4:00 p.m. in the Council Chambers, Public Services Building, 276 Fourth
Avenue, at which time any person desiring to be heard may appear.
DATED: July 23, 1997
COUNCIL AGENDA STATEMENT
Item II
Meeting Date: 8/5/97
ITEM TITLE: Public Hearing: PCC-97-39: Request for a Conditional Use Permit for a
Federal Government office and warehouse facility for the U.S. Department
of Immigration and Naturalization Services at 2411 Boswell Road within
the EastLake I Planned Community - Western Devcon, Inc.
Resolution !f1s'IApproving a Conditional Use Permit for an office and
warehouse facility for the U.S. Immigration and Naturalization Services at
2411 Boswell Road within the P-C zone.
SUBMITTED BY: 00- of PI"""", ~~
REVIEWED BY: City Manageu li ~~ 4/5ths vote: (Yes _/No X>
This request is for a conditional use permit for an office and warehouse building for the U.S.
Department of Immigration and Naturalization Services (INS). This building will serve as a
regional facility for administrative, classroom and warehouse operations for the INS.
The Environmental Review Coordinator has determined that this project falls within the scope of
previous Environmental Impact Report EIR-84-1 for EastLake SPA I. Therefore, no further
review IS necessary.
RECOMMENDATION:
That the City Council adopt the resolution approving a conditional use permit for an office and
warehouse facility for the U.S. Department of Immigration and Naturalization Services, based
on the findings and subject to the conditions contained in the draft Council resolution.
BOARDS/COMMISSIONS:
At its 7/21/97 meeting, the Design Review Committee voted 4-0 to approve the project design,
subject to conditions relating primarily to site plan issues
At its 7/23/97 meeting, the Planning Commission voted 6-0 (Commissioner Tarantino absent) to
approve the project subject to the conditions contained in the draft Council resolution.
11-\
Page 2, Item -
Meeting Date: 8/5/97
DISCUSSION:
Site Characteristics
The subject site is a vacant 4.3- acre parcel at the northeast corner of Boswell Road and Lane
Avenue within the EastLake Business Park. The site is graded and leveled and is ready for
construction. Surrounding land uses include vacant land to the north (future residential) and east
(future industrial), an industrial (freight) company to the west across Lane Avenue and an
unoccupied industrial facility and vacant land to the south across Boswell Road.
Zoning and Land Use
Zone Land Use
Site PC (BC-2, Mfg Service) Vacant
North PC Vacant / Future Residential
South PC (BC-2, Mfg Service) Unoccupied Industrial Building / Facility
East PC Future Industrial per EastLake III GDP
West PC (BC-2, Mfg Service) Industrial/Freight Company
Proposal
The proposed project consists of the construction of an approximately 54,000 sq. ft. office and
warehouse building for the United States Immigration and Naturalization Services. Approximately
43,600 sq. ft. will be used for office space and classroom space and 10,400 sq. ft. as warehouse
space.
Analysis
As noted, the site is located within the EastLake I Planned Community. While the PC Regulations
for the business park do not specifically address public/quasi-public uses such as the proposed;
where PC Regulations are silent, the City's Zoning Ordinance, included in the Municipal Code,
is applied. The Zoning Ordinance specifies that such quasi-public uses can be considered as
unclassified uses through the Conditional Use Permit process. As required by the Zoning
Ordinance, these uses are reviewed by the City Council after recommendation by the Planning
Commission.
Operations:
The predominant use at this site will be office and administrative support uses for the INS.
According to the applicant, approximately 115 permanent staff members will work at the site,
ll--}-
Page 3, Item -
Meeting Date: 8/5/97
arriving between 6:00 a.m. and 8:30 a.m. and departing between 4:30 p.m. and 6:00 p.m.
The warehouse space will be used for storage of papers, forms and other office supplies for the
region; the applicant estimates that there will be 5 to 10 truck delivers per week.
Additionally, training activities will be conducted at this site. Typical training topics might be
language, government, legal issues or other similar classroom-type instruction. On any given day,
it is anticipated that there may be approximately 50-100 personnel attending some type of training
course at this facility. There will be no processing of detainees or property at this location.
Site Circulation:
The site plan reflects that more than adequate parking has been provided to accommodate the
office, warehouse and classroom uses, and site circulation works well. The uses proposed are
consistent with other pennitted and existing uses within the land use district and the business park
as a whole. Other establishments within the park include freight forwarders, mail distribution,
professional offices and light manufacturers.
The only potential issue of concern relates to the loading dock and trucking activities proposed
to be located on the north side of the building. This area will ultimately be adjacent to residential
uses approved within the Rolling Hills Ranch subdivision. However, as noted, the truck loading
activities will be a minor portion of the on-site operations (5-10 deliveries per week).
Representatives of Bay Home Builders, developers of the Rolling Hills Ranch subdivision, have
reviewed the proposal and have indicated that, due to grade differences between the two
developments as well as planned perimeter walls and landscaping, they are not opposed to the
project. Site plan issues are being addressed through the design review process.
Conclusion
As indicated, the uses proposed at this location are consistent with the land use district and
surrounding uses. Staff has included a condition of approval which would require that any
significant changes to the INS operations (i.e., addition of new activities) be considered as a
modification to this Use Permit. This would allow the City to review any new uses through the
public hearing process.
The proposed activities at this site are consistent with other uses within the business park, and all
applicable zoning code requirements are being met. Therefore, staff recommends approval of the
project subject to the findings and conditions stated in the draft City Council resolution.
\1 ~?J
Page 4, Item -
Meeting Date: 8/5/97
FISCAL IMPACT:
All City processing charges have been paid with deposit filing. The subject property will remain
on the tax rolls; therefore, there will be no loss of tax revenue to the City.
Attachments
I. Draft Council Resolution
2. Planning Commission Resolution and Minutes ~~
3. Locator/Plans
4. Disclosure Statement r:-:,G
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(m:\homelplanninglpattylpcc9739c.rep) ~
\ '1-~
RESOLUTION NO. l<i 7'5/
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING A REQUEST FOR A
CONDITIONAL USE PERMIT FOR AN OFFICE!
WAREHOUSE FACILITY FOR THE ~TED STATES
DEPT. OF IMMIGRATION AND NATURALIZATION
SERVICES AT 2411 BOSWELL ROAD
1. RECITALS
A. Project Site
WHEREAS, the property which is the subject matter of this resolution is
diagrammatically represented in Exhibit A attached hereto and incorporated herein
by this reference, and commonly known as 2411 Boswell Road; and
B. Project Applicant
WHEREAS, a duly verified application for a Conditional Use Permit (PCC-97-39)
was filed with the City of Chula Vista Planning Department on May 23, 1997 by
Western Devcon (Applicant); and
C. Project Description; Application for Conditional Use Permit
WHEREAS, said application requests approval of subject Conditional Use Permit
to establish a facility for the U.S. Dept. of Immigration and Naturalization
Services to include office, classroom, and warehouse uses, at 2411 Boswell Road
in the BC-2 (Manufacturing Service) land use district of the EastLake I Planned
Community; and
D. Planning Commission Record on Application
WHEREAS, the Planning Commission held an advertised public hearing on the
Project on July 23, 1997 and voted 6-0 to recommend that the City Council
approve the Project in accordance with Planning Commission Resolution No. PCC-
97-39; and,
E. Notice of Public Hearing
WHEREAS, the City Clerk set the time and place for a hearing on said
Conditional Use Permit application and notice of said hearing, together with its
purpose, was given by its publication in a newspaper of general circulation in the
city and its mailing to property owners within 500 feet of the exterior boundaries
of the property at least 10 days prior to the hearing; and
\Î-.ç
F. Place of Public Hearing
WHEREAS, the hearing was held at the time and place as advertised, namely
August 5, 1997 at 4:00 p.m. in the Council Chambers, 276 Fourth Avenue, before
the City Council and said hearing was thereafter closed.
II. PLANNING COMMISSION RECORD
The proceedings and all evidence on the Project introduced before the Planning
Commission at their public hearing on this project held on July 23, 1997 and the minutes
and resolution resulting therefrom, are hereby incorporated into the record of this
proceeding.
NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL hereby approves
the conditional use permit based on the following findings and all other reports, evidence and
testimony presented with respect to the proposed use, and subject to the following terms and
conditions.
III. CONDITIONAL USE PERMIT FINDINGS
The following findings are required by the Zoning Ordinance which governs the issuance
of conditional use pennits. The City Council of the City of Chula Vista hereby sets forth
the following evidentiary basis for approval of the proposed Project:
A. That the proposed use at the location is necessary or desirable to provide a
service or facility which will contribute to the general well being of the
neighborhood or the community.
The proposed facility for the U.S. Department of Immigration and Naturalization
Services will provide a necessary support facility for this governmental agency,
and the location is within a land use district that includes other similar uses. The
facility will therefore contribute to the general well being of the community as a
whole.
B. That such use will not under the circumstances of the particular case, be
detrimental to the health, safety or general welfare of persons residing or
working in the vicinity or injurious to property or improvements in the
vicinity.
The proposed operations at this facility are similar to other operations within this
land use district and would generally, for non-public users, be permitted uses.
Therefore, this use will not be detrimental to the health, safety, or general welfare
of persons residing or working in the vicinity.
\Î--~
C. That the proposed use will comply with the regulations and conditions
specified in the code for such use.
Conditional Use Permit PCC-97-39 is conditioned to require the Applicants owner
to fulfill conditions and to comply with all the applicable regulations and standards
specified in the Municipal Code for such use.
The conditioning of PCC-97-39 is approximately proportional both in nature and
extent to the impact created by the proposed development in that the conditions
imposed are directly related to and are of a nature and scope related to the size and
impact of the project.
D. That the granting of this conditional use permit will not adversely affect the
general plan of the City or the adopted plan of any government agency.
The granting of PCC-97-39 is consistent with, and will not adversely affect, the
Chula Vista General Plan.
IV. GRANT OF PERMIT
The City Council hereby conditionally grants the Conditional Use Permit subject to the
following conditions, whereby the Applicant shall:
1. Operate the Project as submitted to and approved by the City Council,
except as modified herein and/or as required by the Municipal Code, and
as detailed in the project description.
2. Obtain prior approval from the City for any significant change in
operations at this site, (e.g. the processing of seized property or persons)
in the form of a modification to this Conditional Use Permit. Any such
modification would require the payment of fees and submittal of a revised
application, and may include public hearings.
3. Comply with and implement all requirements of the Fire Marshal as related
to conforming with the Uniform Fire Code and applicable Municipal Code
requirements.
4. Comply with and implement all requirements of the Director of the
Building and Housing Deparunent as related to conforming with the
Uniform Building Code.
5. Comply with and implement all provisions related to Title 24 (Part II),
Disabled Access, to the satisfaction of the Director of Building and
Housing.
\1--1
6. Comply with all City ordinances, standards, and policies except as
otherwise provided in this Resolution. Any violation of City ordinances,
standards, and policies, or of any condition of approval of this Conditional
Use Pennit, or of any provision of the Municipal Code, as determined by
the Director of Planning, shall be grounds for revocation or modification
of this Conditional Use Permit by the City of Chula Vista.
7. This permit shall be subject to any and all new, modified or deleted
conditions imposed after approval of this permit to advance a legitimate
governmental interest related to health, safety or welfare which the City
shall impose after advance written notice to the Permittee and after the City
has given to the Permittee the right to be heard with regard thereto.
However, the City, in exercising this reserved right/condition, may not
impose a substantial expense or deprive Pennittee of a substantial revenue
source which the Permittee can not, in the normal operation of the use
pennitted, be expected to economically recover.
8. This Conditional Use Permit shall become void and ineffective if not
utilized or extended within one year from the effective date thereof, in
accordance with Section 19.14.260 of the Municipal Code.
9. Pay all costs associated with implementing any of the above conditions of
approval.
10. Comply with all conditions of approval of the Design Review Committee
for DRC-97-44.
V. INVALIDITY; AUTOMATIC REVOCATION
It is the intention of the City Council that its adoption of this Resolution is dependent upon
the enforceability of each and every term, provision and condition herein stated; and that
in the event that anyone or more terms, provisions or conditions are determined by a
Court of competent jurisdiction to be invalid, illegal or unenforceable, this resolution and
the pennit shall be deemed to be automatically revoked and of no further force and effect
ab initio.
VI. TIllS RESOLUTION OF APPROVAL IS HEREBY PASSED AND APPROVED BY
THE CITY COUNCIL OF THE CITY OF CHULA VISTA, CALIFORNIA, THIS 5TH DAY
OF AUGUST 1997.
l Î ~ r
Presented by Approved as to form by
~~~~
Robert A. Leiter John M. Kaheny
Director of Planning City Attorney
\Î ...9
~/7
A TT A CHMENT 1
DRAFT COUNCIL RESOLUTION
/
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RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING A REQUEST FOR A
CONDITIONAL USE PERMIT FOR AN OFFICE!
WAREHOUSE FACILITY FOR THE UNITED STATES
DEPT. OF IMMIGRATION AND NATURALIZATION
SERVICES AT 2411 BOSWELL ROAD
I. RECITALS
A. Project Site
WHEREAS, the property which is the subject matter of this resolution is
diagrammatically represented in Exhibit A attached hereto and incorporated herein
by this reference, and commonly known as 2411 Boswell Road; and
B. Project Applicant
WHEREAS, a duly verified application for a Conditional Use Permit (PCC-97-39)
was filed with the City of Chula Vista Planning Department on May 23, 1997 by
Western Devcon (Applicant); and
C. Project Description; Application for Conditional Use Permit
WHEREAS, said application requests approval of subject Conditional Use Permit
to establish a facility for the U.S. Dept. of Immigration and Naturalization
Services to include office, classroom, and warehouse uses, at 2411 Boswell Road
in the BC-2 (Manufacturing Service) land use district of the EastLake I Planned
Community; and
D. Planning Commission Record on Application
WHEREAS, the Planning Commission held an advertised public hearing on the
Project on July 23, 1997 and voted 6-0 to recommend that the City Council
approve the Project in accordance with Planning Commission Resolution No. PCC-
97-39; and,
E. Notice of Public Hearing
WHEREAS, the City Clerk set the time and place for a hearing on said
Conditional Use Permit application and notice of said hearing, together with its
purpose, was given by its publication in a newspaper of general circulation in the
city and its mailing to property owners within 500 feet of the exterior boundaries
of the property at least 10 days prior to the hearing; and
-3
F. Place of Public Hearing
WHEREAS, the hearing was held at the time and place as advertised, namely
August 5, 1997 at 4:00 p.m. in the Council Chambers, 276 Fourth Avenue, before
the City Council and said hearing was thereafter closed.
ll. PLANNING COMMISSION RECORD
The proceedings and all evidence on the Project introduced before the Planning
Commission at their public hearing on this project held on July 23, 1997 and the minutes
and resolution resulting therefrom, are hereby incorporated into the record of this
proceeding.
NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL hereby approves
the conditional use permit based on the following findings and all other reports, evidence and
testimony presented with respect to the proposed use, and subject to the following terms and
conditions.
ID. CONDITIONAL USE PERMIT FINDINGS
The following findings are required by the Zoning Ordinance which governs the issuance
of conditional use permits. The City Council of the City of Chula Vista hereby sets forth
the following evidentiary basis for approval of the proposed Project:
A. That the proposed use at the location is necessary or desirable to provide a
service or facility which will contribute to the general well being of the
neighborhood or the community.
The proposed facility for the U.S. Department of Immigration and Naturalization
Services will provide a necessary support facility for this governmental agency,
and the location is within a land use district that includes other similar uses. The
facility will therefore contribute to the general well being of the community as a
whole.
B. That such use will not under the circumstances of the particular case, be
detrimental to the health, safety or general welfare of persons residing or
working in the vicinity or injurious to property or improvements in the
vicinity.
The proposed operations at this facility are similar to other operations within this
land use district and would generally, for non-public users, be permitted uses.
Therefore, this use will not be detrimental to the health, safety, or general welfare
of persons residing or working in the vicinity.
¥
C. That the proposed use will comply with the regulations and conditions
specified in the code for such use.
Conditional Use Permit PCC-97-39 is conditioned to require the Applicants owner
to fulfill conditions and to comply with all the applicable regulations and standards
specified in the Municipal Code for such use.
The conditioning of PCC-97-39 is approximately proportional both in nature and
extent to the impact created by the proposed development in that the conditions
imposed are directly related to and are of a nature and scope related to the size and
impact of the project.
D. That the granting of this conditional use pennit will not adversely affect the
general plan of the City or the adopted plan of any government agency.
The granting of PCC-97-39 is consistent with, and will not adversely affect, the
Chula Vista General Plan.
IV. GRANT OF PERMIT
The City Council hereby conditionally grants the Conditional Use Permit subject to the
following conditions, whereby the Applicant shall:
1. Operate the Project as submitted to and approved by the City Council,
except as modified herein and/or as required by the Municipal Code, and
as detailed in the project description.
2. Obtain prior approval from the City for any significant change in
operations at this site, (e.g. the processing of seized property or persons)
in the form of a modification to this Conditional Use Permit. Any such
modification would require the payment of fees and submittal of a revised
application, and may include public hearings.
3. Comply with and implement all requirements of the Fire Marshal as related
to conforming with the Uniform Fire Code and applicable Municipal Code
requirements.
4. Comply with and implement all requirements of the Director of the
Building and Housing Department as related to conforming with the
Uniform Building Code.
5. Comply with and implement all provisions related to Title 24 (Part II),
Disabled Access, to the satisfaction of the Director of Building and
Housing.
S-
6. Comply with all City ordinances, standards, and policies except as
otherwise provided in this Resolution. Any violation of City ordinances,
standards, and policies, or of any condition of approval of this Conditional
Use Permit, or of any provision of the Municipal Code, as determined by
the Director of Planning, shall be grounds for revocation or modification
of this Conditional Use Permit by the City of Chula Vista.
7. This permit shall be subject to any and all new, modified or deleted
conditions imposed after approval of this permit to advance a legitimate
governmental interest related to health, safety or welfare which the City
shall impose after advance written notice to the Permittee and after the City
has given to the Permittee the right to be heard with regard thereto.
However, the City, in exercising this reserved right/condition, may not
impose a substantial expense or deprive Permittee of a substantial revenue
source which the Permittee can not, in the normal operation of the use
permitted, be expected to economically recover.
8. This Conditional Use Permit shall become void and ineffective if not
utilized or extended within one year from the effective date thereof, in
accordance with Section 19.14.260 of the Municipal Code.
9. Pay all costs associated with implementing any of the above conditions of
approval.
10. Comply with all conditions of approval of the Design Review Committee
for DRC-97-44.
11. The applicant shall develop and implement a solid waste management plan
to include source reduction, reuse, recycling, and compo sting programs for
the preconstruction, construction, and operational phase of the facility and
its employees and sub-contractors as appropriate. The plan shall be
sufficient to meet the 50% mandated diversion goal, and shall be approved
by the Conservation Coordinator prior to the approval of building permits.
V. INVALIDITY; AUTOMATIC REVOCATION
It is the intention of the City Council that its adoption of this Resolution is dependent upon
the enforceability of each and every term, provision and condition herein stated; and that
in the event that anyone or more terms, provisions or conditions are determined by a
Court of competent jurisdiction to be invalid, illegal or unenforceable, this resolution and
the permit shall be deemed to be automatically revoked and of no further force and effect
ab initio.
h
VI. THIS RESOLUTION OF APPROVAL IS HEREBY PASSED AND APPROVED BY
THE CITY COUNCIL OF THE CITY OF CHULA VISTA, CALIFORNIA, THIS 5TH DAY
OF AUGUST 1997.
Presented by Approved as to form by
Robert A. Leiter John M. Kaheny
Director of Planning City Attorney
/
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EXHIBIT" A"
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ROLLING HILLS RANCH
(FUTURE SUBDIVISION)
I I PROJECT
I / LOCATION
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I LINK-COM S.D.
N.I.F.C.U. (MFR) FREIGHT
I
BOSWELL RD. I
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\ VACANT 15 WilLIG
I VACANT ;:. VACANT FREIGHT
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S~~~I{E
(PRIVATE)
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CHULA VISTA PLANNING DEPARTMENT
LOCATOR PROJECT IMMIGRATION & NATURAlIZATION PROJECT DESCRIPTION,
Œ) APPLlCANT'SERYlCES(WestemDevcon) CONDITIONAL USE PERMIT
~%,:g, 2411 BOSWEll RD. Request: Proposal for a 54,613 sq. ft. govemmental
office building within the Eastlake Business Center I.
SCALE, I ALE NUMBEIè
NORTH No Scale PCC-97-39 Related Case: DRC-97-44
h:\home\plann;ng\carlos\corlos\locators\pcc9739.edr 5/30/97 1.
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ATTACHMENT 2
PLANNING COMMISSION RESOLUTION & MINUTES
II
IL
RESOLUTION PCC-97-39
RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF
CHULA VISTA RECOMMENDING THAT THE CITY COUNCIL
APPROVE AN OFFICE AND WAREHOUSE FACILITY FOR THE U.S.
IMMIGRATION AND NATURALIZATION SERVICES AT 2411
BOSWELL ROAD, WITHIN THE P-C ZONE
WHEREAS, a duly verified application for a conditional use permit was filed with the City
of Chula Vista Planning Department on May 23, 1997 by Western Devcon ("Applicant"); and,
WHEREAS, said application requests approval of a conditional use permit (PCC-97-39)
to establish a public/quasi-public unclassified use of an office, classroom, and warehouse facility
for the U.S. Department of Immigration and Naturalization Services; and,
WHEREAS, the Environmental Review Coordinator has determined that this project falls
within the parameters of the analysis conducted for EIR-84-1, and that no further environmental
review is necessary; and,
WHEREAS, the Planning Director set the time and place for a public hearing on said
application report and notice of said hearing, together with its purpose, was given by its
publication in a newspaper of general circulation in the city and its mailing to property owners
within 500 feet; and,
WHEREAS, the hearing was held at the time and place as advertised, namely July 23,
1997 at 7:00 p.m. in the Council Chambers, 276 Fourth Avenue, before the Planning Commission
and said hearing was thereafter closed; and,
WHEREAS, the Planning Commission voted 6-0 to recommend that the City Council
approve said conditional use permit, in accordance with the findings and subject to the conditions
stated in the draft City Council resolution.
NOW, THEREFORE, BE IT RESOLVED that the Planning Commission approves Resolution
PCC-97-39, recommending that the City Council of the City of Chula Vista adopt attached draft
City Council Resolution approving the conditional use permit PCC-97-39 to establish an office
and warehouse facility for the U.S. Department of Immigration and Naturalization Services.
BE IT FURTHER RESOLVED THAT a copy of this resolution be transmitted to the City
Council.
PASSED AND APPROVED BY THE PLANNING COMMISSION OF CHULA VISTA,
CALIFORNIA, this 23rd day of July 1997 by the following vote, to-wit:
13
AYES:
NOES:
ABSENT:
ABSTENTIONS:
Patty Davis, Chair
Diana Vargas, Secretary
If
MINUTES OF A REGULAR BUSINESS MEETING
OF THE CITY PLANNING COMMISSION OF
CHULA VISTA, CALIFORNIA
Council Chambers
7:07 p.m. Public Services Building
Wednesday, July 23,1997 276 Fourth Avenue, Chula Vista
ROLL CALL:
Present: Chair Davis, Vice Chair Willett, Commissioners Aguilar, O'Neill, Ray, and
Thomas
Absent: Commissioner Tarantino (excused)
Staff present: Ken Lee, Assistant Planning Director
Patty Nevins, Acting Associate Planner
Martin Miller, Associate Planner
Fred Kassman, Redevelopment Coordinator
MOTION TO EXCUSE
For the record, Commissioner Tarantino announced at the last Planning Commission meeting
that he had a six-week teaching commitment and would not be attending one, or possibly
.two Planning Commission meetings. At that meeting, the Commission moved to excuse his
absences.
PLEDGE OF AllEGIANCE/SILENT PRAYER
INTRODUCTORY REMARKS Read into the record by Chair Davis.
APPROVAL OF MINUTES: April 29 and June 11, 1997
MSC (Willett/O'Neill) 6-0-1 (Tarantino excused) to approve the minutes of April 29 and June
11, 1997 as submitted.
ORAL COMMUNICATIONS None
1. PUBLIC HEARING: PCC-97-39; Request for a conditional use permit for a federal
government office and warehouse facility for the U.S. Department of
Immigration and Naturalization Services at 2411 Boswell Road,
within the Eastlake I Planned Community - Western Devcon, Inc.
Background: Acting Associate Planner Nevins reported that PCC-97-39 is a request to construct
an office and warehouse building for the U.S. Department of Immigration and Naturalization
Services. Approximately 115 permanent staff members will work at this site, arriving between
6:00 and 8:30 a.m. and departing between 4:30 and 6:00 p.m. The building will serve as a
regional facility for administrative, classroom, and warehouse operations for the INS. The
I~
Planning Commission Minutes - 2 - July 23,1997
warehouse space will be used for storage of paper, forms, and other office supplies, and the
applicant estimates approximately 5 to 10 deliveries per week.
Ms. Nevins indicated that the primary issues of concern would be related to site planning,
specifically the loading dock activities and trucking activities, which will occur on the north
side of the building. This area will ultimately be adjacent to residential uses within the Rolling
Hills Ranch subdivision. However, the truck-loading activities will only be a minor portion of
the operation. Representatives of the builders to the north have indicated that they are not
opposed to the project.
The office and warehouse uses are consistent with other uses in this area, and staff recommends
approval of the project subject to the conditions in the resolution. Ms.Nevins further stated that
she would like to add one additional condition that is normally used, but was not included.
That condition would be No. 10 "That the project shall comply with all conditions and
requirements of the Design Review Committee."
Ms. Nevins further stated that the Design Review Committee considered the project design and
approved the project, subject to conditions primarily associated with site planning issues.
Staff recommendation: That the Planning Commission adopt Resolution PCC-97-39
recommending that the City Council approve the project in accordance with the findings and
subject to the conditions in the draft Council Resolution.
.
Commission discussion:
. Commissioner Thomas expressed concern on whether there are enough parking spaces
to serve the 115 employees, plus the additional 50 to 100 transitory vehicles that are
anticipated due to the training that will be conducted on the premises.
Staff indicated that there is ample parking, well in excess of the required numbers,
which is based on the building size and type of use of the facility.
. Chair Davis inquired if there was any indication that there could be temporary
detainees at this site.
Ms. Nevins stated that there will be no processing of people or property, and will
strictly be for office and warehouse use. In addition, Ms. Nevins indicated that there
is a condition which states that if there are any changes or modifications to the
operations, that they must come back through the use permit process.
. Commission Aguilar stated that because this site is being leased by a federal agency,
the City has no jurisdiction on the type of business that is conducted.
Assistant City Attorney Moore reaffirmed that federal agencies do not have to
specifically comply with our zoning code if they are using the property to provide a
governmental service, as is in this case. They are, however, agreeing to comply with
our zoning code coming in with a Conditional Use Permit.
I~
Planning Commission Minutes - 3 - July 23,1997
. Commissioner Aguilar asked why a portion of the parking lot was gated with an 8 foot
iron rolling gate.
Ms. Nevins indicated that the gated portion would most likely be for official vehicles
and employee vehicles, and the ungated portion would be for visitor parking.
Public Hearing Opened at 9:05 p.m.
Gene Cipparone, Gene Cipparone Architects, 10525 Vista Sorento Parkway, Suite 120, San
Diego, CA 9212, representing the owners of the project and also acting as design consultant
for the INS addressed the Commission's concerns and comments.
Mr. Cipparone indicated that the intended use is strictly for office, training, and warehouse use.
One component of the project is a 12,000 sf area that has no lighting or heat and is designated
for storage of forms and office supplies. This facility will be the new headquarters and public
information office, which currently is housed in trailer buildings in Otay Mesa. Mr. Cipparone
further stated that there in no intent to harbor, process, maintain, or bring any illegal immigrants
into this facility.
Another component to this project is a training area which will be used as an on-going
education and training facility for agents.
The gated parking area will serve to protect official government vehicles, and also to maintain
a certain level of security to other federal agency personnel.
Public Hearing Closed at 9:15 p.m.
MSC (Willett/O'Neill) 6-0-1 (Tarantino excused) that the Planning Commission approve staff's
recommendation to adopt Resolution PCC-97-39 recommending that the City Council
approve the project in accordance with the findings and subject to the conditions in the draft
Council Resolution.
2. Preliminary Plans for Bayfront/Town Centre I Redevelopment Plan Amendments
Background: Fred Kassman, Redevelopment Coordinator reported that this past Spring, the
Redevelopment Agency and City Council held workshops on both the Bayfront and Town
Centre I Redevelopment Project Areas to determine the current status, what work was
remaining, and what future development potential these areas had. It was clear from
discussions at the workshops that both redevelopment project areas had not fulfilled their
promise, and required further efforts to remove blighting conditions and continue
redevelopment. There are a number of major projects which remain to be completed in both
the Bayfront and Town Centre areas.
The Bayfront Redevelopment Project Area, which was approved in 1974 expires in 1999, and
the Town Centre I Redevelopment Project Area approved in 1976 expires in 2001. Clearly,
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ATTACHMENT 3
LOCATOR & PLANS
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ROLLING HILLS RANCH
PROJECT
LOCATION
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CHULA VISTA PLANNING DEPARTMENT
LOCATOR PROJECT IMMIGRATION & NATURALIZATION PROJECT DESCRIPnON:
C9 APPUCANT, SERVICES (Western Devcon) CONDITIONAL USE PERMIT
PROJECT 2411 BOSWELL RD. Request: Proposal for a 54,613 sq. ft. governmental
ADDRESS,
office building within the Eastlake Business Center I.
SCALE, FILE NUMBER, 2(
NORTH No Scale PCC-97-39 Related Case: DRC-97-44
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ATTACHMENT 4
DISCLOSURE STATEMENT
27
25
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.. Y OF CHULA VISTA DISCLOS, .TEME.",T
You are required 10 file a Statemenl of Disclosure of certain ownership or financial interesls, payments, or campaign
- - a1nlrihutions, on all matters which will require discretionary action on the part of the City Council, Planning Commission, and
all other official bodies. The following information must be disclosed:
1. Ust the names of all persons having a financial inlerest in the property which is the suhjcci of the application or the
contract, e.g., owner, applicant, conlractor, subcontractor, material supplier.
Michael P. Ibe
2. If any person' identified pursuant to (I) above is a corporation or partnership, list the names of all individuals owning
more than 10% of the shares in the corporation Dr owning any partnership interest in the partnership.
3.. If any person' identified pursuant to (1) above is non-profit organization or a trust, list the names of any person
serving as director of the non-profit organization or as trustee or benenciary or trustor of the trust.
,
4. Have you had more than S250 worth of business transacted with any memher of the City staff, Boards, Commissions,
i Committees, and Council within the past twelve months? Yes- No~ If yes, please indicate person(s): -
i
S. Please identify each ånd every person, including any agents, employees, consultants, or independenl contractors who
you have assigned to represent you before the City in this matter.
Joe Beauchamp
Gene Cipparone
6. Have you and/or your officers or agents, in the aggregale, contributed more than SI,OOO to a Councilmembcr in the
current or preceding elCClion period? Ycs- No~ If yes, state whiçh Couneilmembcr(s):
i ' . . (NOTE: ~lacb addilioD31 pa~
I Date: May 22, 1997
Signature of contractor!applicant
I
I 2'7 Print or type name of contractor/applicant
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COUNCIL AGENDA STATEMENT
ItemJL
Meeting Date...8mSL2Z...
ITEM TITLE: Public Hearing on consideration of an increase in sewer service charges
Resolution I X r:;.'J.. Approving an amendment to the Master Fee Schedule
on sewer service charges and transfer of $3,739,580 and $469,900 from
Funds 222 and 226, respectively, into Fund 225
SUBMlTrED BY, D"""" of ""bli, Worn ¡
REVIEWED BY: City Manage~ 'vv~ /'"? (4/Sths Vote: YesLNO-J
On June 17, 1997, Council accepted a report the Sewer Rate Increase and set a Public Hearing
for August 5,1997. The City ofChula Vista's last sewer service rate increase was passed in July
1992. Annual expenditures have increased from $8.62 million in Fiscal Year 1992-93 to an
estimated $14.12 million in Fiscal Year 1997-98. Expenditures have exceeded revenues by a
total of approximately $4.5 million between Fiscal Years 1994-95 and 1996-97. In order to
continue to meet expenses related to the construction and operation of the sewage transportation
and treatment system, the sewer service rates must be increased.
RECOMMENDATION: That Council hold the public hearing and approve the resolution
increasing the monthly sewer rate by 143/8 percent to $18.30 per month per EDU. It is also
recommended that Council retain the 30% discount for qualified low income users and direct staff
to find an appropiate funding source.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION:
The City of San Diego has been planning for the upgrade of the Metropolitan Sewerage System
since 1987, when it decided to drop its request for a waiver from the requirement to convert the
Point Lorna Wastewater Treatment Plant from Advanced Primary to Secondary Treatment.
Subsequently, the City of San Diego began to proceed with an exceedingly expensive plan known
as Alternative IV, which was estimated to cost approximately $2.5 billion. This plan included
upgrading Point Lorna to secondary treatment standards, constructing several smaller water
reclamation plants, removing the sludge handling facilities from Fiesta Island and constructing two
expanded facilities (FIRP), extending the Point Lorna outfall (known as the State Ocean Plan or
SOP), and expansion and rehabilitation of major sewage transmission lines. Based on this plan,
City staff prepared a long term recommendation for rate increases, which was presented to
Council in June and July 1990. This plan was based on the assumption that a gradual yearly
increase in sewer service rates would be preferable to steep increases enacted on a less frequent
basis. Also increasing rates in the 1980's and 1990's, accumulating money for future capital
costs, would help keep Chula Vista's rates lower than San Diego's, then now and in the future.
I ð- -' I
Page 2, Item -
Meeting Date...BL!lSL21...
An increase in sewer service charges from $8.70 to $10.41 per single family house was approved
at that time.
In April 1992 the San Diego City Council refused to ratify the Clean Water Program as described
in Alternative IV and instead adopted the "Consumers' Alternative". The City of San Diego then
pursued a modification of its January 1990 consent decree with the U.S. Environmental Protection
Agency based on the high cost of the original plan and its lack of scientific justification. On
March 31, 1994, Judge Rudi Brewster rejected the original consent decree as not in the public
interest and directed San Diego and the EP A to reach a new agreement. The revised plan was
estimated to cost about $1.5 billion, and included retaining advanced primary treatment at Point
Lorna, construction of two water reclamation plants, the FIRP (move sludge treatment from Fiesta
Island to Miramar) and SOP (extend the ocean outfall) projects, and expansion and rehabilitation
of sewage transmission lines.
The last sewer service charge increase, from $12.21 to $16.00 per single family home, was
adopted in July 1992 in order to cover anticipated expenses during that year. In July 1993
Council rejected the staff recommendation to increase the single family rate from $16.00 to $17.00
per month. Council directed staff not to propose a subsequent sewer rate increase until the
reserves in the Sewer Service Revenue Fund (Fund 225), over $9.0 million at that time, had been
reduced, and until the required Metro facilities and their long term costs were known.
A comparison of the sewer rate increases proposed in July 1990 and the actual rates is shown on
Attachment 1. Although the increase in Fiscal Year 1992-93 was higher than anticipated,
subsequent rates have been substantially lower. For example, the projected single family sewer
service rate for Fiscal Year 1996-97 was $19.96 per month, as compared to the actual current rate
of $16.00 per month.
Historical Revenues and Expenditures
Revenues and expenditures for Fiscal Years 1991-92 through 1996-97 are shown on Attachment
2. For the sake of consistency, payments to the Spring Valley Sanitation District ("Spring
Valley") are included under the years these charges were applicable, not necessarily the years they
were invoiced and paid. The charges paid to other agencies for regional sewage transportation,
treatment and disposal ("Metro" and "Spring Valley") increased 84 percent from $4,598,080 in
Fiscal Year 1991-92 to $8,462,027 in Fiscal Year 1996-97. These charges are now approximately
70 percent of the total budget for Fund 225. The increases are even more dramatic when
compared to the total of $521,772 paid to the City of San Diego for capacity and maintenance and
operation (M & 0) costs for Fiscal Year 1989-90, the year before extensive Clean Water Program
costs began to be incurred.
The column "Chula Vista M & 0 Costs" refers to Chula Vista staff, materials and equipment
costs for the operation, maintenance and administration of Chula Vista's sewer system. These
If"-ð-
Page 3, Item -
Meeting Date-BL!lSL21..
costs have sometimes been referred to as "General Fund Transfers" because such costs are
originally paid out of the City's General Fund.
Although sewer service rates did not increase during this period, revenues increased
approximately 6.5 percent per year between Fiscal Years 1992-93 and 1994-95. This increase is
attributable to the increase in development during this period and the work of Engineering
Division staff in obtaining additional revenue by uncovering properties receiving sewer service
which had not previously been billed for this service. However, the increase in revenue was only
3.5 percent between Fiscal Years 1994-95 and 1995-96, possibly due to the slowdown in new
development. Increased revenue due to new customers in the next few years will, however, be
at least partially offset by the decrease in revenue due to depletion of the reserves in Fund 225.
The comparison between revenues and expenditures show that there was a combined revenue
shortfall of $4,507,574 for Fiscal Year 1994-95 through 1996-97. This shortfall was covered
through the depletion of the reserves in Fund 225.
Five Year Proiection of Expenditures
A projection of sewer system expenditures for Fiscal Years 1997-98 through 2001-02 for Fund
225 is shown on Attachment 3. The total for Fiscal Year 1997-98 is approximately $600,000 less
than the amount in the Fiscal Year 1997-98 City Budget. This amount was based on a detailed
Metropolitan Sewerage System budget for Fiscal Year 1997-98 distributed in May 1997 and
therefore too late for inclusion in the budget. The cost under Spring Valley Backbill includes the
10 percent M & 0 charges withheld by the City of Chula Vista until passage of a new Sewage
Transportation Agreement with the Spring Valley Sanitation District. This agreement was
approved by Council on May 20, 1997.
The City of San Diego provided an estimated overall charge per million gallons of sewage for
Fiscal Years 1998-99 through 2001-02. This was multiplied times the estimated wastewater
discharge for these years. Based on the historic wastewater flow records for Fiscal Years 1991-92
through 1996-97, it is anticipated that flow directly into the Metro system will increase by
approximately 2.4 percent per year, while flow which discharges into the regional system through
the Spring Valley Outfall Sewer should increase by approximately 1.47 percent. Costs included
under Chula Vista M & 0 Costs and Miscellaneous were escalated based on the historic and
estimated costs from Fiscal Years 1991-92 through 1997-98.
As shown on Attachment 3, it is anticipated that expenditures will increase by about 17.0 percent
between Fiscal Year 1997-98 and 1998-99. Expenditures for the next several years after that are
expected to increase slowly based primarily on increases in sewage flow and inflation, since
construction of the major Clean Water Program projects should be completed by the end of Fiscal
Year 1998-99. Costs are not expected to decrease in the foreseeable future because the Clean
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Page 4, Item -
Meeting Date...8mSL21...
Water Program has been financed through the issuance of bonds with minimum terms of 20
years.
Attachment 7 is a graph showing the annual costs to Chula Vista from all sources including Chula
Vista System costs. The graph shows that costs will rise more sharply until 1999 and then be
more level until 2002. The graph also shows that the Chula Vista costs are a small percentage
of the total sewer costs.
Revenue Sources
In order to meet these expenses, staff investigated the following revenue sources:
1. Reserves in Fund 225
2. Transfers from other Sewer related funds
3. Increase in sewer service charges
In order to determine the amount of reserve funds available, the anticipated revenues and
expenditures for Fiscal Years 1996-97 and 1997-98 were added to the fund balance on July 1,
1996 as shown below:
Balance in Fund 225 as of 7/1/96 $ 6,223,085
Est. FY1996-97 Revenue $10,434,000
Est. FY1996-97 Expenditures ($12,375,673)
Est. FY1997-98 Revenue (at current rates) $10,434,000
Est. FY1997-98 Expenditures ($14,115,950)
Est. Balance as of 7/1/98 $ 599,462
It therefore appears that the reserve will be almost depleted by the end of Fiscal Year 1997-98 if
additional revenue is not obtained. If Metro rates are higher than anticipated it is possible that
enough money will not be available to pay these costs. The reserve in Fund 225 can therefore no
longer be used to cover revenue shortfalls.
A second option would be to finance appropriate portions of sewer expenses from other funds.
During Fiscal Year 1997-98 the City will need to pay $577,000 to the Spring Valley Sanitation
District for previously withheld Maintenance and Operation charges from Fiscal Year 1992-93.
An estimated total of $379,900 will be used to pay for Chula Vista's share of past costs for the
rehabilitation and replacement of the Spring Valley Outfall Sewer. Chula Vista's estimated
contribution for Fiscal Year 1997-98 would be $90,000. Therefore, a total of $469,900 could be
transferred from Fund 226, the Sewerage Facilities Replacement Fund, to pay for these costs.
It-Lj
Page 5, Item -
Meeting Date..BmSL21..
As of May 28, 1997 Fund 222, the Trunk Sewer Capital Reserve Fund, had a value of
$16,213,248 in cash and investments. Revenues from sewer capacity charges are deposited into
this fund. As stated in Section 3.14.010 of the Municipal Code, these funds shall only be used,
"for the planning, design, or construction of sewage collection or treatment or water reclamation
purposes." We therefore separated out costs allocatable to the City of Chula Vista for the Clean
Water Program Capital Improvement Program as follows:
Fiscal Year Total CWP CIP Total Flow CV Flow CV Share New EDUs
íMgdl íMgdl ~
1995-96 $40,697,172 180.719 11.356 $2,557,300 $1,044,660
1996-97 $47,793,950 188.236 11.860 $3,011,300 $1,151,220
1997-98 $66,437,659 185.100 11.934 $4,027,855 $1,543,700
Chula Vista flow includes both flow discharged directly to the San Diego Metro system and flow
initially discharged to the Spring Valley Outfall. The Chula Vista share for Fiscal Year 1997-98
also takes into account wastewater quality as well as quantity. The "New EDUs Share" was based
on the ratio ofremaining capacity to total Chula Vista Metro capacity (19.2 mgd for Fiscal Year
1995-96 and 1996-97, 19.35 mgd for Fiscal Year 1997-98).
Funds deposited in Fund 222 will need to be used within the next five years in order to construct
a regional sewage trunk line along the southern border of Chula Vista which will provide
sufficient sewer capacity to accommodate the major developments in the eastern areas of the City,
such as EastLake, Otay Ranch, Salt Creek Ranch, the Olympic Training Center and Sunbow II.
Portions of these developments are currently being temporarily pumped into the Telegraph Canyon
trunk sewer; however, there will not be enough capacity to accommodate these flows in the near
future. The cost of this sewer was estimated at $9.9 million in November 1994. Transferring
$3,739,580 from this fund into Fund 225 should not affect the financing of the regional sewerage
facilities.
The use of Fund 222 to pay for a portion of the future debt service for construction of Clean
Water Program Capital Improvement Projects will depend on the amount of annual revenue, the
amount of annual debt service payable to San Diego and the actual cost of the regional sewerage
facilities. Since the non-interest revenue is dependent on the amount of new development, it can
fluctuate from year to year. Sewer capacity fee revenue (Account 222-3762) has been $2,013,246
for Fiscal Year 1996-97 through May 28, 1997. A review ofrevenues in this account from Fiscal
Year 1991-92 indicates that revenues have fluctuated between $1.8 and $2.3 million per year with
the exception of Fiscal Year 1992-93, when annual revenues were only $964,154. Previous
calculations indicate that the future development portion of Clean Water Program CIP projects
will likely be at least $1.0 million per year. It therefore seems reasonable to project future
transfers from Fund 222 to Fund 225 at $1.0 million per year.
ð"'Ç'
Page 6, Item -
Meeting Date~
Revenue Projections
Based on the fund transfers discussed above, revenue projections were prepared for the next five
years. It was assumed that monies which could not be obtained from other funds, interest and
miscellaneous revenue such as industrial waste permit fees would need to be obtained from sewer
service charges. It was also assumed that a minimum reserve of 20 percent of expenses would
need to be maintained, since revenues from the Montgomery area collected on the tax bills are
generally not received by the City until December at the earliest, and revenues collected by the
Otay Water District are received by the City two to three months after they are collected.
The number of Equivalent Dwelling Units (EDUs) per year was projected based on the anticipated
increase in flows into the Spring Valley trunk sewer and Metro system. Based on the prior years'
history, this increase is anticipated to be about 2.25 percent per year. By comparing historical
flows to revenues and reviewing prior studies, it was estimated that one EDU would be equal to
approximately 220 gallons per day of flow. Since the vast majority of sewer service revenues are
from single family or multiple family residences (over 90 percent in the Otay Water District
service area), and since the rate for both categories is the same per EDU, it was considered
appropriate to use the residential rate in the analysis.
Alternative 1 (Attachment 4) presents the sewer service rates which would be needed to pay for
expenses and maintain the reserve as discussed above. Due to the fund transfers, it would be
possible to avoid enacting a rate increase for Fiscal 1997-98. However, this would mean that an
increase of approximately $5.00 per month will be required in Fiscal Year 1998-99. The total
single family sewer service and storm drain fee would be increased by approximately 30 percent
from $16.70 per month to $21.68 per month. An overall increase of about 8 percent to $23.40
would subsequently be required in Fiscal Year 1999-2000.
Due to the problems caused by a sudden high increase of this magnitude, a second alternative was
prepared (Attachment 5). This involved increasing the revenue to Fund 225 from the sewer
service charges by 15 percent per year, or an overall increase of about 13.8 percent from $16.70
to $19.00 in Fiscal Year 1997-98, and an overall increase of about 13.9 percent from $19.00 to
$21.65 in Fiscal Year 1998-99. This option would also involve a projected increase of
approximately 6.9 percent to $23.15 in Fiscal Year 2000-01.
Alternative 2 is recommended, since two increases of 14 percent per time should be easier for
customers to budget for than one 30 percent increase. Additionally, the overall rate after five
years is lower under Alternative 2. Neither alternative includes an increase of the sewer
replacement or storm drain fees, which are each $0.70 per EDU for all years considered. The
storm drain rate may be reevaluated at a later date.
In evaluating the appropriateness of a rate increase, we reviewed the current rates of other sewer
agencies in San Diego County (Attachment 6). Out of the twelve Metro agencies surveyed, Chula
1\ /~
Page 7, Item -
Meeting Date..BmSL21..
Vista has the third lowest rate and is well below the average Metro rate of $22.63 per month for
single family homes. Even with the rate increase to $18.30 in Fiscal Year 1997-98 for the sewer
portion of the bill, Chula Vista would still have the third lowest rate of the Metro agencies based
on the previous year's schedule. Therefore, the rate increase appears reasonable. Additionally,
certain agencies with higher rates than Chula Vista are increasing their rates for Fiscal Year 1997-
98. For example, the Spring Valley Sanitation District is raising its residential rates from $263
to $276 per year ($23.00 per month), and the Lakeside Sanitation District's increase is from $255
to 265 per year ($22.08 per month). The City of San Diego's average single family rate will be
increased six percent to $25.74 per month.
Proposed Sewer Rates
The proposed sewer service rates for all categories are shown below. In order to be equitable and
comply with State Guidelines for setting sewer rates, all rates will be increased by the same
percentage.
~ Without Storm Drain Fee Includin~ Storm Drain Fee
Single family $1 8. 30/month $19.00/month
Multiple family $1.84/100 cubic feet (HCF) $1.90/HCF water used
water used
Low income $12. 81/month $13.51/month
Commercial/Industrial
Low $1.68/HCF water used $1.74/HCF water used
Medium $2.07/HCF water used $2.13/HCF water used
High $2.79/HCF water used $2.85/HCF water used
Proposition 218 Impacts
It is not clear if the sewer fee is covered under Proposition 218. This is because Prop 218 covers
fees that are charged solely because of property ownership. Sewer fees are not charged if the
house is not connected to the sewer. Therefore, a property owner who has a septic tank would
not be charged a sewer fee. Also, if the water account is closed, there would not be a sewer fee
for that time period for properties billed for sewer service directly by the City. If the sewer fee
is covered by Prop. 218 it is clear that it is not necessary to have a ballot to raise the fee.
However, there would have to be a public hearing held not less than 45 days after mailing notices
of the rate increase to each property owner. To be safe, we are complying with that provision of
Prop. 218.
It is staff's understanding that, under current law we would not be able to fund the 30% discount
from the sewer fund. This is because the City Attorney has advised that the sewer fee could then
be construed to be a tax, since part of the fee of some are being used to subsidize the discount of
others. It is staff's recommendation that the low income rate be retained, since the 14% rate
I ~/l
Page 8, Item -
Meeting Date..8L!!SL2L
increase on top of eliminating a 30% discount would be be very hard on low income users. The
low income discount could be financed by other funds, such as the General Fund and/or possibly
CBDG. We currently have 319 low income users, which would require a contribution of around
$21,000 to give a 30% discount. If Council decides to offer a low income discount, staff will
return with a recommended funding source and change to the budget.
Public Notification and Response
City staff mailed out approximately 45,000 public notices of the rate increase and public hearing
to all property owners and rate payers in the City of Chula Vista. Staff members have received
about 15 phone calls on this issue and 12 letters. These letters can be classified as follows:
Two letters - from the Chula Vista Chamber of Commerce
Two letters - from residents enclosing an article on the City of San Diego's efficiency panel,
requesting that the savings to San Diego be passed on to Chula Vista's ratepayers
Four letters - from residents opposing the proposed increase
One letter - from a resident agreeing with the increase but requesting that sewer charges be
included on the tax bill
One letter - from a resident regarding the receipt of three notification letters at one address
One letter - from the Pacific Southwest Association of Realtors opposing the increase
One letter - from a property management company opposing the increase
The two letters dated June 17 and July 3, 1997 from Rod Davis of the Chula Vista Chamber of
Commerce brought up several issues addressed in the City's responses dated June 18 (Attaclunent
8) and July 16, 1997 (Attaclunent 9). Several of his questions pertained to the sewer capacity and
connection fees, which are paid at the time building permits are issued, and the storm drain fee,
which is billed with the sewer service charges. These fees have not been increased for several
years, and are not proposed to be increased at this time.
The main issue pertaining to Fund 225 and the sewer service charges was the general fund
transfers and miscellaneous expenditures. As previously discussed, this transfer reimburses the
general fund for personnel, equipment and materials costs involved in maintaining and cleaning
our 300+ miles of sewer lines and 18 pump stations, repairing broken sewer laterals, performing
the engineering and management functions for the system, and billing customers in the Sweetwater
Authority and Montgomery service areas for sewer service charges. The miscellaneous expenses
are charged directly to Fund 225 and have included the cost of contracts for sewer service charge
billing, industrial waste monitoring, contracts for maintaining sewage flow meters, and the
purchase of certain supplies. These costs have generally increased due to the expense of
separating the water bill from the sewer bill. These costs decreased in Fiscal Year 1997-98
because many of the. billing costs have been included instead as general fund transfers (Chula
Vista M&O).
FISCAL IMPACT: Adoption of this rate structure and the recommended transfers will allow
the City to cover the anticipated sewer-related expenses in Fiscal Year 1997-98. The City has
I~.--¡
Page 9, Item -
Meeting Date~
sufficient funds in Funds 222 and 226 to cover the transfer of $3,739,580 and $469,900,
respectively.
Attachments:
1. Ao""¡ ,,~ ",,"œ C""", ". cru."" Prop- i. July 1990 /
2. Sewer Expenditures Over the Past Fiscal Years
3. Cost Projections for Fiscal Years 1997-98 through 2001-02
4. Revenue Projections Alternative I - Fund Transfers, Fee Increase ar!# Qed
5. ..,- Pmj~ti"m Al"""'ti~ 2 - G""'oJ ..'" 1_= ~ ~
6. Survey of San Diego County Sewer Fees per EDU
7. Graph - Metro costs vs CV costs
8. June 18, 1997 Letter from John Goss to Rod Davis ~
9. July 16, 1997 Letter from John Goss to Rod Davis ~O"
EMC: File: 0790-55- KY.{)81 erne
H:\SHAREDISEWRATES.EMC
July 30. 1997 (8:46am)
/~~ì
RESOLUTION NO.~~~
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING AN AMENDMENT TO THE
MASTER FEE SCHEDULE ON SEWER SERVICE CHARGES
AND TRANSFER OF $3,739,580 AND $469,900 FROM
FUNDS 222 AND 226, RESPECTIVELY, INTO FUND 225
WHEREAS, the city of Chula Vista's last sewer service
rate increase was passed in July 1992; and
WHEREAS, annual expenditures have increased from $8.62
million in Fiscal Year 1992-93 to an estimated $14.12 million in
Fiscal Year 1997-98; and
WHEREAS, expenditures have exceeded revenues by a total
of approximately $4.5 million between Fiscal Years 1994-95 and
1996-97 and in order to continue to meet expenses related to the
construction and operation of the sewage transportation and
treatment system, the sewer service rates must be increased; and
WHEREAS, the city Council held a public hearing on August
5, 1997 to consider an increase in sewer service charges; and
WHEREAS, staff recommends that the monthly sewer rate be
increased by 14 3/8 percent to $18.30 per month per EDU. .
NOW, THEREFORE, BE IT RESOLVED the city Council of 'the
City of Chula vista does hereby approve an amendment to the Master
Fee Schedule to increase the monthly sewer rate 1;0....$18.30 per montlì'
per.EÐU on.the first bill issued after September 1, 1997.
BE IT FURTHER R~SOLVED that the City Council does hereby '"
transfer $3,739,580 and $469,900 from Funds 222 and 226,
respectively, into Fund 225.
Presented by Approved as to form by
q~
John P. Lippitt, Director of
Public Works
C:\rs\sewer.inc
~ /y~/¿/
A TT ACHMENT 1
ACTUAL SEWER SERVICE CHARGES
VS. CHARGES PROPOSED IN JULY 1990
530
528 --
526 -.
S24 --
-- - - -
522 - - -
- --
- - - - -
- - -- - --
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--- - - -- - -
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516 -
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58
56 ,
94 95 96
PISCAL '
11:-4.Rs
! . ACTUAL CHARGES . PROPOSED CHARGES I
! ~:SCAL I .1..C I UAL I PROPOSED
I YEAR CHARGES CHARGES
I
I 1990 I 58.70 I 58.70
I 1991 I S10.41 I S1 0.41
1992 I 512.21 I S12.13
1993 I $16.00 I S13.39
I 1994 I 516.00 I S14.78
I 1995 I S16.00 S15.33
I 1995 I S16.00 S18.05
I 1997 I S16.00 S19.95
I 1998 I UNKNOWN S22.08
I 1999 I UNKNOWN S24.43
I 2000 I UNKNOWN S27.04 I~-IO
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ATTACHMENT 6
SURVEY OF SAN DIEGO COUNTY SEWER FEES PER EDU
MONTHL Y SINGLE FA MIL Y SEWER SERVICE CHARGES FOR PAST FIVE YEAR PERIOD
METRO AGENCIES FY 96/97 FY 95/96 FY 94/95 FY 93/94 FY 91/92 BILLING METHOD
CITY OF CHULA VISTA 16.00 16.00 16.00 16.00 12.21 THREE DISTRICTS (VARIED)
CITY OF CORONADO 31.64 31.64 27.55 27.55 20.00 ANNUAUTAX ROLL
CITY OF DEL MAR 35.41 35.41 35.41 35.41 29.08 BIMONTHLYNVATER BILL
CITY OF EL CAJON 18.33 15.86 15.00 14.58 13.32 BIMONTHLY/DIRECT BILL
CITY OF IMPERIAL BEACH 31.19 31.19 31.19 29.40 23.92 ANNUAUTAX ROLL
CITY OF LA MESA 20.00 19.58 17.08 15.75 15.75 BIMONTHLYIDIRECT BILL
CITY OF LEMON GROVE 14.08 14.08 14.08 14.08 14.08 ANNUAUTAX ROLL
CITY OF NATIONAL CITY 14.68 14.68 14.68 14.68 11.41 BIMONTHLY/DIRECT BILL
CITY OF POWAY 22.77 22.77 21.92 20.29 18.25 BIMONTHLY/WATER BILL
CITY OF SAN DIEGO 24.28 21.28 18.15 17.06 15.08 BIMONTHLYNVATER BILL
LAKESIDE SANITATION DIST. 21.25 21.25 21.25 21.25 17.00 ANNUAUTAX ROLL
SPRING VALLEY SANITATION DIST. 21.91 21.91 21.91 20.25 14.50 ANNUAUTAX ROLL
AVERAGE RATE 22.63 22.14 21.19 20.53 17.05
NON-METRO AGENCIES FY 96/97 FY 95/96 FY 94/95 FY 93/94 FY 91/92 BILLING METHOD
CITY OF ESCONDIDO 14.70 14.15 14.15 14.15 14.15 MONTHLYNVATERBILL
CITY OF OCEANSIDE 19.26 19.26 18.33 18.33 18.33 MONTHLYNVATER BILL
CITY OF VISTA 15.42 15.42 15.42 15.42 14.92 ANNUAUTAX ROLL
AVERAGE RATE 16.46 16.28 15.97 15.97 15.80
I TOTAL AVERAGE ~
(H:IHOM EIENGI NEERISEWERISDSWRA T. WB 1)
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ClN OF
CHUlA VISTA
OFFICE OF THE CITY MANAGER
June 18, 1997
File No. 0790-55-Jo.'Y-081
Mr. Rod Dal;is, Executive Director
Chula Vista Chamber of Commerce
233 4th Ave
Chula Vista, CA 91910
D ~j
ear r. Vl.
17Us is in response to your letter of June 17, 1997 asking questions about the sewer
budget. If you have any additional questions, please ask John Lippitt or me.
QUESTIONS
1. How man\' sewer reloled funds are there?
17lere are 5 sewer relo1ed funds, most of them hal'e limitations on how they can be
spent.
--- .--
2. How much monel' is in each?
The Fund baJonce as of June 30, 1997 is estimated to be:
Fund: 220 Sewer Income Fund $756,195
221 Special Sewer Fund $484,260
222 Trunk Sewer Cap Res $16,315,079
225 Sewer Sen'ice ReI' Fund $2,971,559
226 Sewer ReplacemenJ Fund $3,911,998
3. \Wzolloans from each or to each remain outstandinl!?
As of this dole, there are three interfund loans outstanding from the Trunk Sewer
Capital Reserve (Fund222) to other Funds as follows:
June 1992 - Transpor1.aÉÌ.On DIF Fund for Oray Valley Road Widening
Project. Principal- $420,000. Accured InJerest ol 9% - 189,000. Total
outstanding $609,000.
Dec. 1995 - Town Centre JJ Redevelopment Poject Area for cash shortage.
Principal- $1,500,000. Accured !1zlerest @ 5.657% -146,229_58. Total
Outstanding $1,646,230
Dec. 1995 - Southwest Redel'elopmenJ Project Area for cash shortage.
Principal-$825,000. Accured ¡merest @ 5.657% - $78,380
Total Oulstanding - $903,380.
¡ f//7
27ôFOURTHAVENUE' CHULAVISTA. CAcl"()HNIA~'9'O- (6'9)_69.':!;~3' '_Ft.X(ô'9)~~S'2-
Page 2
Chamber of Commerce
As of this date there is one interfund loan outstanding from the Sewer Income Fund
(#220) as follows:
June 1994 - Bayfrom Conservatory Trustfor sewer construction project.
Principal - $43,852 Accured ¡merest @ 6% - $8,017
. Total Outstanding - $51,870
4. What is the interest role paid to or bv each?
See answers for question #3.
5. In November of 1996. the sewer capaciJv fee was Duoted to me as $2220 per EDU.
vet the iJem 20 informlJÍion 11U1kes iJ look like the EDU is $1044 f!oinf! to $1543.
What is the total EDU charf!e for sewer relo1ed cost in all sewer relo1ed funds?
Fund 220 - This fee is a hook up charge to a person connecting to an existing
sewer that was constructed by someone else and there is no repaymem agreemem.
This is not charged to the majoriJy of hook ups in the City since the developer
builds the sewer main. The fee is $16 per from foot of the lot being connected.
Fund 222 - Sewer CapaciJy Fee is $2220 per EDU charged at the time a building
penniJ is issued. --. .-.
Fund 225 - Monthly sewer sen'ice charge, Currentl)' $15.30 per momh. 17lŽs is the
charge that is being proposed to increase by $2.30 per month.
Fund 226 - Sewer Replacemem Charge. This fee is collected as part of the monthly
sewer bill and is $.70 per momh per EDU..
6. Allhouf!h the momhlv sewer fee per home comparison of cities in the countl' is
provided. there is no comparison of total sewer fees. Can a total of all sewer fees
comparison be prol'ided?
Yes. The attached chart lists the capaciJy charges as of November, 1996 for the
County Cities.
7. Particular/I' unclear is the purpose of the multi-million dollar transfer to the f!eneral
fund listed in Attachmem 2 as well as an undiscussed miscellaneous expense line
item that f!oes from $171.000 plus to an almost $600.000 with no explanation.
All sewer expenses are budgeted through two funds, the General Fund pays Jor all
Chula Vista Employee expenses that are invoil'ed wuh the sewer system, ie. Sewer
maimenance crews and engineers in Public Works, and sewer billing people in
Finance. The other costs such as paying the clwrges to San Diego and Spring
Ir/lð'
Page 3
Clwmber of Commerce
Valley for Treatmerit and transportation are directly paid from Fund 225 Sewer
Service Fund. Fund 225 also transfers money to the General Fund to reimburse it
for its costs. ThaJ is what the General Fund transfer is for. Attachment 2 in the
report also lists the other costs in the sewer Budget (225) in categories. Metro is the
cost to City of San Diego for treatment of sewage. Spring Valley is to pay for
Chula Vista flows (about 20 percent oftoral) through the Spring Valley trunk line
(located in the Sweetwater Valley). Most of the Spring Valley charge is passed on
to Metro for sewage treatment costs. The Miscellaneous costs are for all the other
items in the Budget for Fund 225 such as costs to San Diego for providing service
to us for industrial waste program, certain billing cost to the County and Otoy
Water District etc.
8. The sewer rate is $16.00 per month. vet the sewer bill is $33.40. With almost
30.000 households in the cir". where is this $223.000 plus accounted for and what
is iJ used for?
The rate is now $16.00 per month for sewer relaJedfees, i.e., $15.30 per month for
the service (Fund 225) and $0.70 per month for Sewer facility replacement. There
is also a Stonn Drain fee on the Sewer bill that is $0.70 per month. That is not
sewer relaJed and is used to maintain and build stonn drain systems. The City bills
its Sweetwater customers every 2 months; therefore, the~ota1.!~ $3~:!0.
I hope this answers your concerns. If you have any questions or comments please call me
at 691-5031 or John Lippitt at 691-5021.
Sincerely,
R: ISRAREDIADM I NISEWCCJ I'L
I~/II
~,~ ,,= ~.,,' '" ",=:-.
EXIßBIT "A"
SEWER CONNECTION CHARGES
1996
AGENCY CONNECTION CHARGE / EDU
Chula Vista $2220
City of San Diego $2500
Coronado $2559
County of San Diego (Spring Valley SD) $2500
Del Mar $2797
El Cajon $3220
Imperial Beach $2400
La Mesa $2400
Lemon Grove $170
National City $2700 iDc!. const of sew lateral
--. .-
Poway $3015
Santee (padre Dam) $2612
Source: BIA Survey 1996
I f--)-O
/Î IT I1rY1 11¿-A/í 9' ~ (ft..-
~~ -::
(flY OF
(HUlA VISTA
QFFICE OF THE CITY MANAGER
July 16, 1997
Mr. Rod Davis, Executive Director
Chula vista Chamber of Commerce
233 Fourth Ave.
Chula Vista, CA 91910
Dear Mr. Davis:
This is in response to your letter of July 3, 1997 asking
additional questions on sewer issues.
1. I was trvinq to qet mv arms around the total cost for a
developer to connect to the sewer. This would have several
components --connection, capacitvetc. What we are tryinq
to understand is the total cost for a new home to connect to
the sewer.
The answer to this question is complicated by the fact that
some of the sewer related fees are dependent on where the
house is located, whether the sewer in front of the house
was built by the developer, or another developer who has
reimbursement due, and whether the house is in a sewer DIF
basin, i.e., a developer had to build a significant trunk
sewer offsite to serve an area. That developer can be
reimbursed for his extraordinary costs above that which
would just serve his property. For example, and simplicity,
below are the fees necessary for a single family home in
Eastlake Greens, in the Telegraph Canyon Sewer basin whose
street sewer was built by the developer.
Capacity Charge $2200
Telegraph Cyn Sewer DIF $ 184
Administrative Fee L2L
Total $2418
2. With reqards to the storm drain fee that is part of the bi-
monthly sewer bill, I would like to know how much is in the
Fund, what loan(s) there are if any. what interest is paid
and how much is typically spent on a yearly basis.
The estimated fund balance for June 30, 1997 is $273,000.
This fund is estimated to have revenues this year of
$471,000. These funds are used for storm drain maintenance,
construction of new drainage facilities, and operation of
the Federal NPDES pollution requirements. There are no
loans from this fund. The average yearly expenditure is
around $450,000.
) ð -.ð-I
276 FOUiiTH AVENUE. CHULA VISTA. CAUFOiiNIA 91910 . (619) 691-5031 . FAX (619) 585.5612
""""-roo......'..
Mr. Rod Davis, Executive Director
July 16, 1997
Page 2
3. In vour response. vou indicated that transfers to the
qeneral fund were to pay for staff time.postaqe processinq
etc. Is this cost reasonable? For ease of comparison. what
is the overhead load as defined by transfer to the qeneral
fund. and what miscellaneous expenses are there expressed as
a percentaqe of total annual collections? FinallY. how does
that percentaqe compare to San Dieqo. National City,
Carlsbad and Oceanside?
The total general fund transfer represents 25% of the total
sewer budget and for 1997-98 the GF transfer is projected to
be $3.5 million. This covers the cost of maintaining and
cleaning our 300+ miles of sewers, 16 pump stations,
repairing broken sewer laterals, performing the engineering
and management functions for the system, and providing the
bill collection for the Sweetwater Sewer Customers. There
are also miscellaneous expenses amounting to $328,000.
These are charges that are charged directly to the Sewer
Fund and are for paying Otay Water District for billing
their customers for sewage, and some of the billing costs
that we farm out to consultants etc.
National city's local costs are about 30% of their-. total
sewer budget. We haven't been able to get a-number from
City of San Diego as yet but have requested it. Oceanside
and Carlsbad are not part of the Metro system. Their costs
would,not be that relevant in comparison to Metro system
agenc~es.
4. Do any other cities have similar fee structures to ours-
capacity fee,connection fee.m6nthly fee and storm drain
fee?
All of the agencies in San Diego County have a monthly sewer
service charge. It may be charged bi-monthly, or yearly on
the tax bill, but it is 'based similar to our fee. All the
growth agencies in the County have a connection fee also.
Enclosed are exhibits listing the monthly sewer fee and the
connection fee by agency. Some of the Agencies have storm
drain fees. I know that City of San Diego has a storm drain
fee. The County has a Flood Control tax. Chula Vista was
able to create a drainage fee since we were a Charter City.
5. Are there proiections available for Fund 222 and 225 which
take into account the fees paid for new construction?
No. However, Attachment 3 of the June 17, 1997 report
discusses projected costs through the year 2001/02. If it
is assumed that the growth rate of development in Chula
Vista is 2000 dwellings per year, revenues to fund 222 would
be approximately $4.4 million per year.
CITY OF CHULA VISTA I~-'})-
Mr. Rod Davis, Executive Director
July 16, 1997
Page 3
Rod, I hope this answers your questions, if you have any more or
want clarifications of these answers please call John Lippitt at
691-5021.
Sincerely,
~:~MÞ ~ tØ
city Manager
JDG:mab
Exhibits
\
--. .-
H:\SHARED\ADMIN\SEWCC3.JPL If<}3
CITY OF CHULA VISTA
PUBLIC HEARING CHECK LIST
PUBLIC HEARING DATE: d ~ 7
SUBJECT: C>/~ F- ~"A - ~
LOCATION:
7.
SENT TO STAR NEWS FOR PUBLICATION .. BY FAX ~ ;ÆY HAND ; BY MAIL
PUBLICATION DATE ;:þ~/J ? - -
-
MAILED NOTICES TO PROPERIT OWNERS NO. MAILED
PER GC §54992 Legislative Staff, Construction Industry Fed, 6336 Greenwich Dr Suite F. San Diego, 92122
LOGGED IN AGENDA BOOK ~
COPIES TO: /
Administration (4)
Planning
Originating Department .
Engineering ~
Others ~
City Clerk's Office (2) /
POST ON BULLETIN BOARDS pi//? 7
SPECIAL INSTRUCTIONS:
7/93 .55.
NOTICE OF PUBLIC HEARING
BY THE CHULA VISTA CITY COUNCIL
CHULA VISTA, CALIFORNIA
NOTICE IS HEREBY GIVEN THAT THE CHULA VISTA CITY COUNCIL will hold
a public hearing to consider a sewer rate increase to begin September I, 1997:
The primary factor in the cost increase is for the cost of sewage treatment provided
by the City of San Diego. San Diego has been ordered by the Federal Government
to upgrade its sewage treatment process at a cost in excess of $1.5 Billion. The
proposed rates for fiscal year 1997/98 are:
User Type Mo. Current Ch!,!. Mo. Proposed Ch!,!.
Single Family Home $16.00 $18.30
Multiple Family $1.61/HCF water used $1.84/HCF water used
Commercial/In dust.
Low strength $1.47/HCF water used $1.68/HCF water used
Me'.!.. stre,qgth $1.81/HCF water used $2.07/HCF water used
High strength $2.44/HCF water used $2.79/HCF water used
For further information call (619) 585-5700, Extension 4102.
Any petitions/protests to be submitted to the City Council must be received by the City
Clerk's office no later than noon of the hearing date.
If you wish to challenge the City's action on these matters in court, you may be limited to
raising only those issues you or someone else raised at the public hearing described in this
notice, or in written correspondence delivered to the City Clerk's Office at or prior to the
public hearing.
SAID PUBLIC HEARING WILL BE HELD BY THE CITY COUNCIL on Tuesday,
August 5, 1997, TIME CERTAIN 6:00 P.M. in the Council Chambers, Public Services
Building, 276 Fourth Avenue, at which time any person desiring to be heard may appear.
DATED: July 23, 1997
COUNCIL AGENDA STATEMENT
Item /1
Meeting Date 08105191
ITEM TITLE: RESOLUTION I~T~g 11 ACCEPTING CLAGGETT WOLFE ASSOCIATES'!
(CONSULTANT) PHASE I FINDINGS AND RECOMMENDATIONS AND AUTHORIZING
STAFF TO PROCEED WITH PHASES II AND III TO DEVELOP A SMALL BUSINESS
REVOLVING LOAN PROGRAM; 2) APPROVING AN AMENDED AGREEMENT WITH
CONSULTANT FOR PHASES II, III AND A NEW PHASE IV (EDI GRANT
APPLICATION) AT AN ADDITIONAL COST OF $5,700 TO BE PAID FROM RE-
PROGRAMMED CDBG AND ECONOMIC DEVELOPMENT FUNDS; AND 3)
AUTHORIZING STAFF TO USE SECTION 108 AS A RESOURCE FOR ECONOMIC
DEVELOPMENT PROJECT NEGOTIATIONS, SUBJECT TO APPROVAL BY COUNCIL
OF INDIVIDUAL LOAN APPLICATIONS
SUBMITTED BY: C""",;,¡ D""",. D~~
REVIEWED BY: City Manage~G ~ ------ / (415ths Vote: Yes- No..xJ
BACKGROUND:
Council previously approved $30,000 in Community Development Block Grant (CDBG) funding to hire a
consultant to prepare a feasibility analysis of the HUD Section 108 Loan/Loan Guarantee Program, and
assuming positive results, to assist staff to develop a Chula Vista Business Loan Program. Council approved
a 3-phased agreement with the Consultant for the following:
Phase I: Feasibility Analysis and recommendations regarding general types of loans
City should pursue;
Phase II: Development & Submission of City's generic application to HUD; and
Phase III: Development of recommended loan program(s).
Phase I has been completed (Attachment A). The conclusions are addressed herein. Staff is recommending
that Phases II and III be undertaken in order to submit a Generic Section 108 application concurrently with
an Economic Development Initiative (EDI) grant application (Phase IV). The proposed Section 108 application
to HUD will request authority for the City to create a Small Business Revolving Loan Program (RLP)
and for the City to be able to make RLP loans, subject to conservative, pre-established, HUD-
approved loan criteria. The EDI application will request grant monies for a Loan Loss Reserve Fund.
lConsultanlfonna,lyknownasCradoWolfa.....iates. It should be notadthal the Principalohanga did not affeot the axparti.. ot lhe Co nsullant.
¡q-I
Page 2. Item -
Meeting Date 08105197
Finally, staff is recommending that Council authorize staff to also begin to utilize the Section 108 Loan/Loan
Guarantee Program as an economic development tool for specific development projects. with loan
terms to be negotiated on a project-by-project basis. These negotiated. project-specific loans or
loan guarantees would be subject to approval by Council and would require separate. individual
applications for approval to HUD.
RECOMMENDATION: That Council adopt the resolution which: 1) accepts Consultant's Phase I findings
and recommendations, and authorizes staff to proceed with Phases II and III to develop a Small Business
Revolving Loan Program; 2) approves and authorizes the Mayor to execute an amended agreement with the
Consultant for Phases II and III. and a new Phase IV (ED! grant application) at an additional cost of $5.700;
and 3) authorizes staff to use "Project Specific" Section 108 loans as a resource for economic development
project negotiations, subject to approval by Council of individual loan applications.
BOARDSICOMMISSIONS RECOMMENDATION: Staff presented a HUD Section 108 funded Business
Loan/loan Guarantee Program Issue Paper to the EDC. The EDC by consensus recommended that staff move
forward on the project.
DISCUSSION:
The purpose of this staff report is to provide Council with a summary of:
A. The results of the Phase I Feasibility Study
B. The scope and timing of Phase II, III and IV
C. "Project Specific" 108 loans; and
D. Staffing and/or consultant needs related to these potential programs
A. PHASE I FEASIBIlITY STUDY RESULTS
The Phase I Report provides an overview of the Section 108 Program and application process; program
options; successful models; potential risk to the City; an analysis of Chula Vista business credit needs and
available business capital; and findings and recommendations. Attachment B was prepared by staff to
address questions Council may have regarding the program in some detail.
The Consultant analyzed the need for a loan guarantee program and/or a direct loan program in the City of
Chula Vista. This evaluation included extensive input from the Chula Vista business community via personal
interviews and a one.day workshop (see Appendix B of Consultant's report). The consultant found that
Chula Vista and the San Diego Region have one of the most diverse sets of private and public lending
sources and products in the country (see Appendices C and D of report).
The credit needs of the Chula Vista business community, like most cities, are varied. Financing to meet
many of these needs is currently available at a number of major lenders as well as independent banks and
public programs. However, the Chula Vista business community is underserved by a number of these
/'1 ~J-
Page 3. Item -
Meeting Date 08105191
programs, and the City of Chula Vista lacks sufficient financing options to support development and
redevelopment activities. The Consultant concluded that there is a need in Chula Vista for: "1) a
nicbe program for both business, real estate and development financing that provides an additional
source Df capital tD fill gaps in existing programs 'and tD address deals not served by existing
programs; 2) a focused effort tD market existing and proposed lending programs tD Chula Vista's
business community; 3) a qualified individual "deal maker" experienced in business and development
financing who can make deals work in Chula Vista using the wide range Df products available; and
4) a strong technical assistance component that is tied tD loans made tD small, less sophisticated
businesses." The consultant recommends that Chula Vista establish a direct Revolving LDan Program (RLP)
Dffering "gap" financing tD Chula Vista businesses to facilitate better access to private lenders. The
consultant recommends that the City submit a fieneric Section 108 application which will allow the City
to approve individual RLP loans meeting the RLP's pre.determined underwriting criteria.
The proposed RLP poses nD risk tD the City's General Fund. Unlike previous Section 108 loans
issued tD the City, wherein the funds have been "paid Dff" by the City from annual CDBG awards,
the proposed business loans will be repaid by the business borrowers themselves. Future CDBG
funds are allocated Dnly in the event Df a default, at which time the City can negotiate tD pay Dff
the debt DVer an extended period Df up tD 20 years. The proposed RLP will have conservative
underwriting criteria which will reduce the risk Df default and eliminate the need for any additional
City collateral.
B. SCDPE AND TIMING DF THE PROPOSED AMENDED CONTRACT (PHASES II, III AND IV)
As provided in the existing Council-approved contract with the Consultant, Phase II entails the consultant
assisting staff to prepare and submit the fieneric Section 108 Application. Phase III entails full development
of the recommended "gap" loan program. Staff is recommending that the existing contract be amended to
include a Phase IV, the preparation and submission of an EDI grant application to solicit funds for a Loan
Loss Reserve fund.
Phase II (Section 108 Generic Aoolication)
The consultant will assist staff to develop a fieneric application to HUn which reserves the requested
Section 108 authorization amount. The funds will be drawn down upon the City's issuing an RLP loan.
(While the authorization amount that Chura Vista will request will be determined during Phases II and III, it
is anticipated that staff may recommend in the neighborhood Df $1 million.) The Generic Application must
delineate basic, standard underwriting criteria, such as the maximum loan maturity; cash flow to debt
coverage; collateral requirements; etc. It is anticipated that the criteria will be conservative in Drder
tD minimize risk Df default. There will be ample opportunity for public and Council input as HUn requires
that two public hearings be held prior tD finalization Df the HUn application. Council will be requested
tD approve the 108 application prior tD its submittal.
/7/3
Page 4. Item -
Meeting Date 08105197
Phase IIllProaram DeveloomenU
The consultant will assist staff to develop comprehensive guidelines for the RlP (including RlP policies and
procedures and boiler plate legal documents). Examples of RlP policies to be developed include eligible
businesses and uses of funds, targeted areas and/or industries (if any), minimum and maximum loan amounts,
specific underwriting criteria, private dollar matching requirements, and application review and approval
process. A potential scenario for a RlP loan would be to loan $30,000 of Section 108 funds to enhance
a private bank loan for $100,000 to purchase equipment. Examples of procedures to be developed include
all aspects of loan administration, including staffing issues and potential contracts for service. Progress
on Program Development will be presented to Council during the Section 108 Generic Application
Public Hearings. Upon completion of the RLP guidelines, staff will return to Council with a report
and presentation of the RLP Loan Manual, as well as specific staffing recommendations.
Phase IV IEDI Grant Aoolicationl
Application for ED! grants is a competitive process. The selection criteria include: quality and innovation
of the proposed project; the City's capacity to perform; and the extent to which the program or project
helps to address the community's overall economic development needs and to leverage private andfor public
funds. The consultant will assist staff to prepare the EDI application upon receipt of the Notice of Funding
Availability (NOFA) from HUD, anticipated in October. If ED! is not funded by Congress, Phase IV will not
be implemented.
EDI applications must be accompanied by a Section 108 application. Staff and the consultant are
recommending that Phase II and III be undertaken concurrently. The condensed timeframe for Phases II and
III would allow the City to submit the EDI application and the 108 application by the projected November
deadline (see Timeline, Attachment C).
C. "PROJECT SPECIFIC" SECTION 108 LOANS
Negotiated loans which are uniquely structured, generally as part of a comprehensive incentive package for
a larger development project, and which do not comply with the RlP's pre-established criteria, require
individual HUD approval. Council approval of staff's recommendation to authorize the use of "Project
Specific" Section 108 loans for individual real estate development projects would allow staff to begin to
market the program, and to negotiate the use of Section 108 on a project -by-project basis if and when the
need arises. The Consultant's report recommended that a financial analyst experienced in real estate
development financing and public and private financing tools be contracted by the City to optimize the
Section 108 program's effectiveness. Most cities utilize this approach in negotiating major economic
development deals, including Section 108 loans and/or loan guarantees. An example of a project-specific
loan is the City of Worchester, Massachusetts which provided an $11.7 million Section 108 loan guarantee
to be used as credit enhancement to secure $14.1 million in AFl-CIO financing for a 93,000 square foot
biotech facility-
11~~
Page 5. Item -
Meeting Date 08/05/91
D. POTENTIAL STAFF/CONSULTANT IMPACTS
1. Proposed RLP
In order for an RLP to succeed, the program must have dedicated administrative support high IV
experienced in public/private lending. Each of the City loan programs surveyed bV staff have at
least one full-time loan officer, and typically a part.time CDBG compliance officer (see Attachment
D). RLP support includes: 1) credit analysis; 2) loan packaging; 3) staff support for the City's Loan
Review Committee; 4) loan servicing 5) legal review; 6) CDBG compliance review; and 7) marketing.
Staff is not recommending a dedicated City staff person at this time, and will be evaluating
the feasibility of contracting with a local entity such as the Small Business Finance
Certified Development Corporation (CDC), a private financial institution. and/or a consultant
for these RFP.related services. Staff will also analyze the possibility of using existing City staff
for legal review, CDBG compliance review and loan marketing. Existing work loads and projected
program demand will be major factors in this consideration. If it is determined that existing staff
are unable to accommodate the RLP, the use of a consultant for these tasks will also be evaluated.
As noted, specific staffing needs and recommendations will be brought to Council following Program
Development. It is anticipated that program income will cover a portion of contract and/or staff
time.
2. Project.Specific, Negotiated Loans
As noted, it is recommended that a financial specialist be accessible to assist in negotiating "Project
Specific" Section 108 loans. The Community Development Department has recently issued an RFO
for a Financial Consultant and will be making a recommendation to Council in the near future. This
consultant will be utilized and paid on an as.needed basis and within Council approved budgets for
assistance in negotiating wide-ranging economic development/redevelopment projects. Staff envisions
using the selected consultant to assist in structuring financial incentive packages using Section 108.
3. Future Chula Vista Financial Assistance Programs
The proposed RLP will clearly not serve all the needs of the Chula Vista small business community
because of its conservative nature. In order to be most effective the RlP should work in
conjunction with other small business assistance programs that address specific needs of "riskier"
small businesses. Staff's intent is to eventually develop a portfolio of financial incentive "tools:'
including loan andfor grant programs and related technical assistance, to support comprehensive
retention, expansion and attraction efforts. The proposed RlP is one such tool and is seen to some
extent as a "Pilot Program" to "test" local demand, product structuring, and required staffing and
administration resources. Staff and Council will need to assess the need for additional staff
resources as additional programs are developed.
1C);:j
Page 6. Item -
Meeting Date 08/05/91
FISCAL IMPACT:
Section 108 Revolvino Loan Prooram fRLPI
Approval of the resolution authorizes the consultant to proceed on Phases II and III at a combined cost of
$13,229. Council previously appropriated CDBG funds for this purpose. Staff's recommendation to amend
the existing contract in order to prepare an ED! application (Phase IV) will cost the City an additional
$5.700. Staff has identified $5,500 in an unencumbered FY 96/97 CDBG account (#653-6531-BG105) and
$200 in the Economic Development Professional Services account (#100-0261-05201).
No RLP loans will be made until the RLP program has been approved by Council. Potential impacts of
implementing an RLP program in the future include:
1) Risk due to default: In the case of a borrower's default the City's CDBG collateral would be called
upon to payoff the debt. Staff's intent is to apply for an EDI grant to serve as a Loan Loss
Reserve. If our application is unsuccessful. staff may request Council to appropriate up to
$100,000 of future CDBG funds for this purpose. General Fund monies are not at risk.
2) Staffing: Our survey of RLP's for similar size cities shows that these programs are typically
supported by one full time Loan Specialist and one part.time CDBG Analyst. Staff will present
Council with staffing recommendations following completion of Program Development during which
time staff will evaluate the use of contractual support and/or existing City staff, as well as the use
of RLP loan fees and interest premiums as a funding source.
Section 108 Proiect-Soecific Authorization
Fiscal impact of these loans will be analyzed and presented to Council on a case.by.case basis for approval
prior to submission to HUD.
ATTACHMENTS ./
A. HUD Section 108: Phase I Feasibility Analysis
B. What is the HUD Section 108 Program? <SJ
C - Proposed Timeline ç:,~
D - Sample 108/CDBG.Funded Loan Programs~
E. First Amendment to Agreement with Credo, Wolfe and Associates j
ICDIDAI H,\HDME\COMMDEV\STAFF.RE~OB.D5.97\HUDID8 [Ju~ 31, 1997 12:24pmJl
J9/~
RESOLUTION NO. l~lÇ3>
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA
VISTA 1) ACCEPTING CLAGGETT WOLFE ASSOCIATES"
(CONSULTANT) PHASE I FINDINGS AND RECOMMENDATIONS
AND AUTHORIZING STAFF TO PROCEED WITH PHASES II AND III
TO DEVELOP A SMALL BUSINESS REVOLVING LOAN PROGRAM;
2) APPROVING AN AMENDED AGREEMENT WITH CONSULTANT
FOR PHASES II. III AND A NEW PHASE IV (EDI GRANT
APPLICATION) AT AN ADDITIONAL COST OF $5.700 TO BE PAID
FROM RE-PROGRAMMED CDBG AND ECONOMIC DEVELOPMENT
FUNDS; AND 3) AUTHORIZING STAFF TO USE SECTION 108 AS
A RESOURCE FOR ECONOMIC DEVELOPMENT PROJECT
NEGOTIATIONS. SUBJECT TO APPROVAL BY COUNCIL OF
INDIVIDUAL LOAN APPLICATIONS
WHEREAS. City Council directed staff to evaluate the benefits of implementing a
HUD Section 108 business development loan/loan guarantee program; and
WHEREAS. Council approved $30.000 in Community Development Block Grant
(CDBG) funding to hire a consultant to prepare a feasibility analysis of the HUD 108 Loan/Loan
Guarantee Program. and assuming positive results. to assist staff to develop a Chula Vista
Business Loan Program; and
WHEREAS. Council approved an agreement with Credo. Wolfe and Associates for
consulting services; and
WHEREAS. the existing Consultant agreement consists of three phases as follows:
Phase I - Feasibility Analysis and recommendations regarding general types of loans City should
pursue; Phase II - Development & Submission of City's generic application to HUD; and Phase 111-
Development of recommended loan program(s); and
WHEREAS. Phase I has been completed and the report is provided as Attachment
A. and Consultant determined there is a need for direct "gap" financing to supplement private
loans; and
WHEREAS. staff is recommending that Phases II and III be undertaken in order to
create a Small Business Revolving Loan Program and to submit an application to HUD requesting
authority for the City to make such loans, subject to pre-established. HUD-approved loan criteria
; and
WHEREAS. staff is recommending a new fourth phase, i.e. the preparation and
submission of an Economic Development Initiative (ED ) grant application to HUD for Loan Loss
Reserve funds to support the Section 108 Loan Program; and
WHEREAS. the existing contract. therefore, needs to be amended to reflect the
expanded scope and cost to cover Phase IV; and
'Con,.ltant 'o,mady known a, C'ado Wolfs A...",;ata,. ",ho"d b, notad that tba Prin,;oa' ,bang' d;d not aff", tho a'oart;,a of tho Con,"'ant.
19-7
WHEREAS, staff is recommending that Council authorize staff to begin to utilize
the Section 108 Loan/Loan Guarantee Program as an economic development tool for specific large
development projects, with loan terms to be negotiated on a case-by-case basis. These
negotiated, project-specific loans or loan guarantees would be subject to approval by Council and
would require separate, individual applications for approval to HUD; and
WHEREAS; approval of this resolution poses no risk to the City's General Fund. The
proposed 108 Loan program is unlike previous City use of Section 108, wherein the 108 funds
have been "paid off" by the City from annual CDBG awards. The business loans are repaid by the
business borrowers themselves. CDBG funds are allocated only in the event of a default, and then
are allocated to payoff the debt over an extended period - up to 20 years
NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista
does hereby adopt the resolution which: 1) accepts the Consultant's Phase I findings and
recommendations and authorizes staff to proceed with Phases II and III to develop a Small
Business Revolving Loan Program; 2) approves an amended agreement with the Consultant for
Phases II and III and a new Phase IV (EDI grant application) at an additional cost of $5,700
($5,500 from Acct. 653-6531-BG105 and $200 from Acct. 100-0261-5201 re-programmed to
Acct. 649-6491-BG106) and authorizes the Mayor to execute the same; and 3) authorizes staff
to use Section 108 funds as a resource for economic development project negotiations, subject
to approval by Council of individual loan applications.
Presented by Approved as to form by
CJ-: S-~ þ
/
Chris Salomone
Director of Community Development
[(DDAI H,\HOMElCOMMDEV\RESDS\hud108IJ,,'y 30. 1997 (7,54pm[(
/~ - 2!
First Amendment
to the
Agreement between
City of Chula Vista
and
Credo, Wolfe and Associates
for HUD Section 108 Consultation and Planning Services
This Amendment, dated July 22, 1997 ("Amendment") is entered
into by and between the City of Chula Vista ("City") and Claggett
Wolfe Associates (formerly Credo, Wolfe and Associates)
("Consultant") for purposes of amending that certain Agreement for
HUD Section 108 Consultation and Planning Services between the City
and Consultant dated September 19, 1995 ("Agreement"). Except as
expressly provided herein all other terms and conditions of the
Agreement shall remain in full force and effect.
1. Exhibit A, Paragraph 4 shall be changed to:
"Claggett Wolfe Associates"
2. Exhibit A, Paragraph 7 shall be revised to add the following:
"The Consultant will be responsible for preparing an Economic
Development Initiative (EDI) grant application upon HUD
publishing a Notice of Funding Availability (NaFA) , which will
include a planning session and an assessment of community
needs relative to the EDI application."
3. Exhibit A, Paragraph 8 (a) shall be revised to add the
following:
"Phase IV Economic Development Initiative (EDI) Grant
Application
Task 1: Planning Session
Task 2: Determination of the best approach for
obtaining ED! funding relative to community
needs
Task 3: Preparation of EDI grant application, including
one draft
In the event that EDI is not funded Consultant shall not
perform any Phase IV services and will not be compensated for
any Phase IV services."
Page 1
~/t-9
4. Exhibit A Paragraph 8 (c) shall be revised to add the
following:
DELIVERABLE PHASE/TASK DESCRIPTION DUE DATE
5 Phase II, Assist City Staff with Eight (8) weeks
Task 1 Preparation and after approval
Submission of Generic to proceed w/
Authorization Phase II
Application
6 Phase III, Recommend Loan six (6) weeks
Task 1 Committee Composition after approval
and Review of to proceed w/
Candidate List Phase III
7 Phase III, Draft Phase III Twelve (12)
Task 2(a) Memorandum of weeks after
Recommendations for approval to
Structure and proceed w/
Administration of Phase III
Direct Loan Program
8 Phase III, Final Phase III Four (4) weeks
Task 2(b) Memorandum of after draft
Recommendations for Phase III
Structure and report
Administration of
Direct Loan Program
9 Phase III, Direct Loan Operation Four (4) weeks
Task 3 Manual after final
Phase III
report
10 Phase III, Half-Day Staff Four (4) weeks
Task 4 & 5 Briefing and Support after delivery
for Council of Operations
Presentation (same Manual
day)
11 Phase IV, Preparation of EDI 3 working days
Tasks 1-3 grant application, prior to due
including a draft date for Notice
application of Funding
Availability of
EDI
5. Exhibit A Paragraph 11 (B) shall be revised to add the
following:
Phase IV: Planning Session, Needs Assessment $5,700
and Preparation of EDI proposal
Page 2
~ /c;/j ¿?
Signature Page
to
First Amendment to Agreement between City of Chula Vista and
Claggett Wolfe Associates
for HUD Section 108, Economic Development Initiative (EDI) , and
Planning Services
IN WITNESS WHEREOF, City and Consultant have executed this
Amendment thereby indicating that they have read and understood
same, and indicate their full and complete consent to its terms:
Dated: , 1997 City of Chula Vista
by:
Shirley Horton, Mayor
Attest:
Beverly Authelet, City Clerk
Approved as to form:
John M. Kaheny, City Attorney
Dated: Claggett Wolfe Associates
By4LJ~
Chuck Wolfe, P CJ.
~ Page 3
19'//
~
HUD Section 108: Phase I
Feasibility Analysis
Prepared For:
City of Chula Vista
Community Development Department
Submitted by:
CLAGGETT WOLFE ASSOCIATES
607 North 1st Street
San Jose, CA 95112
Telephone (408) 885-8610
FAC(408) 286-4064
April 7, 1997 -:!i 11'1
/1-/ Claggett Wolfe Associates
TABLE OF CONTENTS
~
EXECUTIVE SUMMARY 1
SECTION 1: INTRODUCTION..........................................................................................................3
1.0 Background ............................................................................................................................3
1.1 Analysis of HUD Procedures and Policies................................................................................5
SECTION 2: SECTION 108 APPLICATION PROCESS........................................................................6
SECTION 3: SECTION 108 LOAN PROGRAM OPTIONS """.............................................................8
3.1 Overview of a Loan Guarantee Program .................................................................................8
3.2 Overview of a Direct Loan Program .......................................................................................9
3.3 Benefits of Guarantee and Direct Loan Programs................................................................... 10
3.4 Costs of Guarantee and Direct Loan Programs .......................................................................11
3.5 Analysis of Potential Problem Areas and Risks .................................................................... 12
SECTION 4: CREDIT NEEDS ANALYSIS........................................................................................14
4.1 Infonnation Collection ........................................................................................................14
4.2 Credit Needs of Business in Targeted Industry Sectors........................................................... 14
4.3 Credit Needs of Businesses in Redevelopment and the BEBC ................................................15
4.4 Summary of Credit Needs for All Sectors .............................................................................16
SECTION 5: SOURCES OF BUSINESS CAPITAL............................................................................. 18
SECTION 6: FINDINGS AND RECOMMENDATIONS....................................................................19
6.1 Findings.............................................................................................................................19
6.2 Recommendations...............................................................................................................20
6.2.1 Need for a Loan Program..................:.................................................................................20
6.2.2 Section 108 Applicability ..................................................................................................21
6.2.3 Guarantee Loan Program vs. Direct Loan Program................................................................ 21
6.2.4 Section 108 Application .Process......................................................................................... 22
6.2.5 Underwriting Criteria .......................................................................................................22
APPENDIX A: Section 108 Application Process...............................................................................A-l
APPENDIX B: Interview Participants............................................................................................ B-1
APPENDIX C: Loan Program Matrix ..............................................................................................C-l
APPENDIX D: Loan Program Summaries........................................................................................D-1
California Capital Access Program...........................................................................................D-l
EMTEKFund............................................................................................................................D-4
Banker's Small Business CDC of San Diego: Term Loans to Business Program ..............................D-6
Banker's Small Business CDC of San Diego: Stands By Letters of Credit Program .......................D-8
California Export Finance Office............................................................................................ D-ll
Small Business Administration 7(a) Loan Program .................................................................. D-13
CDC Small Business Finance Small Business Administration
504 Debenture Loan Program.............................................................................................. D-15
California Southern Small Business Development Corporation: . .
California's Regional Guarantee Program.......................................................................... D-17
California Economic Development Lending Initiative (CEDLI):
Co-Lending Program for Small Business ............................................................................. D-19
Border Environmental Commerce Alliance (BECA): Micro Loan Program ................................. D-21
ACCION San Diego: Micro Loan Program............................................................................... D-23
/I-,;).
EXECUTIVE SUMMARY
The study that follows is divided into six sections, each of which is summarized below.
Introduction
The Department of Housing and Urban Development (HUD) Section 108 program was established
as part of the Community Development Act of 1974 to provide communities with an additional
mechanism for accessing funds to acquire real estate, rehabilitate public property, and fund
relocation, demolition and site improvements related to acquisition. With subsequent changes in
1986, 1987 and 1990, the Section 108 program increased its value to communities as a tool for
supporting local economic development and redevelopment effons related to business attraction,
business retention, business fonnation and area revitalization.
To date, HUD has approved over 600 Section 108 loan applications with communities such as
Philadelphia, Pennsylvania; Buffalo, New York; and Worcester, Massachusetts exercising the
program to fund revolving loan funds, incubator development and real estate development projects.
Application Process
The Section 108 program allows communities to submit one of two types of applications: a
generic application; or a project-by-project application. A generic application places more of the
control over the lending process in the hands of the community by allowing for the funding of
multiple projects that meet pre-detennined credit criteria under one application without having to
obtain HUD Central approval. A project-by-project application is more restrictive because it
requires that each project be submitted to HUD Central for credit review. Since many communities
target Section 108 funds for deals that are difficult to approve using standard credit criteria, they
find that a project-by-project approach is more appropriate. However, it should be noted that
communities using a generic application can'still submit deals on a project-by-project basis.
Loan Program Options
For the purposes of this analysis, a loan guarantee program and direct loan program were
evaluated. These two options represent the most common fonns of loan programs for community
based lending. Loan guarantee programs are established to reduce the risk to the lender by
guaranteeing that a specified percentage of the loaned amount (for example 75%) will be paid to the
lender by the guarantor should the borrower default on the loan. A good example of this type of
program is the Small Business Administration (SBA) 7(a) loan program which uses federal funds
to guarantee loans made by private lending institutions. Direct loan programs are established to
move primary control over the lending decision from an outside party such as a private lender to an
internal organization such as a City. This approach allows the controlling organization to define
loan maturities (e.g., 5 yrs., 7 yrs., etc.), equity requirements, interest rate levels, interest rate
types (i.e., fixed or variable rates of interest), and acceptable underwriting criteria (i.e., allowable
debt to equity, cash flow to cover repayment, etc.).
Credit Needs Analysis
The study included a needs analysis to identify the credit (or capital) needs in Chula Vista. For the
purposes of this analysis special emphasis was placed on evaluating the needs of businesses in the
high-tech, biotech and environmental technology sectors along with the typical retail, service and
manufacturing business sectors that represent the mix of businesses operating in Chula Vista. In
addition, the project team worked with City staff to identify the specific needs of Chula Vista's
redevelopment areas.
/1-3
HUD Section 108: Phase I Feasibility Analysis Page 2
Sources of Business Capital
Chula Vista and the San Diego Region have one of the most diverse sets of private and public
lending sources in the country. The area is well represented by major lenders such as Union Bank,
Bank of America and Wells Fargo Bank who have a variety of lending products, and who
participate in a number of the federal and state loan guarantee programs. Chula Vista is also served
by independent banks including Grossmont Bank and Pacific Commerce Bank whose primary
customer base consists of small to medium sized businesses. In the realm of public lending
sources, Chula Vista has the advantage of being served by 13 different programs. These include a
combination of 7 guarantee programs,S direct loan programs and 1 reserve fund program.
Findings and Recommendations
As with most areas, the credit needs of the Chula Vista business community are varied. Financing
to meet many of these needs is currently available through an abundance of local programs.
However, the Chula Vista business community is under served by a number of these programs
either as a result of a lack of awareness on the part of Chula Vista business owners, a lack of
focused program marketing in Chula Vista on the part of lending organizations and/or a reluctance
of local lenders to participate in the programs (this is specifically related to the guarantee
programs). In addition, the City of Chula Vista lacks sufficient financing options to support
development and redevelopment activities.
In general, there is a need in Chula Vista for:
. a niche program for both business, real estate and development fmancing that provides an
additional source of capital to fill gaps in existing programs, and to address deals not
served by existing programs,
. a focused effort to market existing and proposed lending programs to Chula Vista's
business community; .
. a qualified individual --deal maker--experienced in business and development financing
who can make deals work in Chula Vista using the wide range of products available; and
. a' strong technical assistance component that is tied to loans made to small, less
sophisticated businesses.
Based on these needs, the project teams recommends that the City of Chula Vista establish a direct
loan program by submitting a generic application to establish a HUD Section 108 loan program.
//-4 Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page 3
SECTION 1: INTRODUCTION
1.0: Background
The Department of Housing and Urban Development (HUD) Section 108 program was established
as pan of the Community Development Act of 1974 to provide communities with an additional
mechanism for accessing funds to acquire real estate, rehabilitate public property, and fund
relocation, demolition and site improvements related to acquisition. Section 108 was primarily a
replacement for Urban Renewal which was one of the six categorical programs made into a block
grant by the original CDBG legislation. Since its inception, Section 108 has enabled Community
Development Block Grant (CDBG) entitlement communities to access billions of dollars for
development projects, direct loan programs, loan guarantee programs and other eligible uses. To
date HUD has over 600 approvals of Section 108 loan applications which provide communities
with the option to access program funds. Over half of these communities have exercised the option
to fund one or more projects through this program.
In its early days, Section 108 had limited appeal as a result of its relative short maturity (a
maximum of 7 years) and its limits to funding only activities related to real estate. However, since
1974 a number of changes have been made to Section 108 and the CDBG program to make it more
attractive to communities. These changes are highlighted below.
. In 1986, the Consolidated Omnibus Budget Reconciliation Act eliminated the Federal
Financing Bank as the originator of Section 108 notes. The notes are now sold to private
investors through a consortium of national brokers in public offerings.
. In 1987, HUD expanded the use of Section 108 funds to include economic development
activities and funding to for-profit businesses thus increasing the attractiveness of Section
108.
. In 1990, the Cranston Gonzalez National Affordable Housing Act lengthened the maximum
term of Section 108 to 20 years. Moreover, the Act allowed small cities to participate in
Section 108 programs. Furthermore, communities were able to increase their maximum
Section 108 indebtedness from three to five times their annual CDBG entitlement.
Since its inception, there have been a number of successful uses of Section 108 throughout the
country. Examples of communities that have successfully used Section 108 include:
Philadelnhia
The City of Philadelphia, Pennsylvania manages a large portfolio of Section 108 loans
through a nonprofit Pennsylvania Industrial Development Corporation (PIDe). PIDC has
had experience with the Section 108 program since the early 1980's, and Philadelphia was
one of the twenty cities selected for the early Section 108 Demonstration Program.
In 1994, the City borrowed $20 million of Section 108 funds in the public offering to
refund a Revolving Loan Fund (RLF) using a generic application for recapitalization.
Approximately $5 million are in notes of fifteen year maturity, and the remaining $15
million are in notes of tWenty year maturity. PIDC chose these maturities to address gaps in
projects involving real estate. In addition to its real estate projects, the organization funds
expanding, existing businesses. PIDC has strict underwriting standards, and has not
incurred any losses in their portfolio although they have experienced three defaults with full
recovery. . .
A-S Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page 4
.!M'f¡¡}Q
The City of Buffalo, New York is also a long time user of the Section 108 program, with a
ponfolio of approximately $30 million, and has used a generic application for its RLF. The
program is administered by a local nonprofit, the Buffalo Enterprise Development
Corporation (BEDC), which completes a thorough credit review on each prospective
transaction. As of 1993, the program had experienced a delinquency rate of only
approximately 5% in volume and 1.5% in number.
Through its years of participation, Buffalo has employed the Section 108 program in a
number of applications including downtown redevelopment, manufacturing business loans,
incubator tenant loans, a cinema complex development project, and publicly owned
property rehabilitation.
Worcester
Worcester, Massachusetts has used the Section 108 program for a variety of uses including
the construction of a fourth building in the Massachusetts Biotechnology Research Park.
The Four Biotech project was undertaken by the Worcester Business Development
Corporation, a public benefit corporation created by the local Chamber of Commerce.
The City has a loan approval of $23 million in Section 108 funds with the Four Biotech
building absorbing approximately $11.5 million of their authorization. By utilizing a
generic application, the City does not have to go through a two step--Area Office and HUD
CentraI--review when individual transactions are identified.
One of the purposes of the recapitalization of the RLF in 1994 was to provide the advantages of
Section 108 (fixed rate, reasonably priced, extended maturities) to small, less sophisticated
bOiTOwers, particularly those located in tÞe Empowennent Zones and Enhanced Ente¡prise
Communities.
Section 108 is different from traditional economic development efforts sponsored by HUD.
Historically, CDBG revolving loan funds and the Urban Development Action Grant (UDAG)
program involved the utilization of real estate and economic development loans to private concerns
and often had provisions for residuals, the programs were actually sophisticated grantsmanship.
The communities incurred no risk if the bOITowers did not repay the loans and there was no cost of
funds, which enabled the communities greater latitude in structuring loan tenns around the ability
of the bolTower to repay.
Section 108 is inherently different in that there is a cost of funds (an interest rate) and risk. If the
borrower does not repay, the community must still repay the investors (who receive a full faith and
credit guarantee of timely payment of principal and interest from HUD) even though the
community, through a loan, has attempted to transfer this risk to the bolTower. This risk and cost
of funds makes Section 108 a true development finance program. Consequently, the community
must seriously underwrite each transaction.
The community must pledge the following to HUD as security for the Section 108 indebtedness:
1) future CDBG entitlements, 2) program income realized from the loan, and 3) additional security
as HUD deems necessary. If the community uses good underwriting standards, the only additional
security necessary is a specific lien on the asset financed (mortgage, deed of trust, UCC filing) and
some fonn of guarantee from the principals or entrepreneur. .
A-' Cloggett Wolfe Associates
HUD Section 108: Phase 1 Feasibility Analysis Page 5
1.1 Analysis of OUD Procedures and Policies
As mentioned above, the HUD Section 108 program has undergone a number of changes since its
inception and, like many of HUD's programs, is currently under review by Congress. To
detennine the potential impacts of current, and previous, procedure and policy changes, the project
team contacted both HUD Area Offices and HUD's Washington Central office to detennine
whether any procedures or policies have changed.
HUD has accepted generic applications since the Demonstration Program in the early 1980's, and
since 1987 the Section 108 program has seen few procedural changes. The current authorization
for Section 108 and the Economic Development Initiative is $1.5 billion and $50 million,
respectively.
The principal policy changes in the Section 108 program occurred in 1987 when economic
development activities became eligible for funds. These changes expanded eligibility for Section
108 program funds to include: the acquisition, construction, reconstruction, rehabilitation or
installation of commercial or industrial buildings, structures, and other real property equipment and
ùnprovements; a provision of assistance to private for-profit business in the fonn of loans, loan
guarantees, grants and interest supplements for technical assistance and any other fonn of support
for eligible economic development activities; and outreach efforts for marketing available forms of
assistance, for reviewing and underwriting applications for assistance, for management of assisted
activities, and for the screening, referral, and placement of applicants for employment opportuuities
generated by CDBG eligible economic development activities.
Based on the results of this analysis, Chula Vista's efforts to establish a HUD Section 108 loan
program should not be adversely impacted by current and proposed HUD procedures and policies
regarding Section 108.
A-7
Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page 6
SECTION 2: SECTION 108 APPLICATION PROCESS
The Section 108 program allows communities to submit one of two types of applications: a
geTll!ric application; and a project-by-project application. A brief description of each application is
provided below.
Generic Application - A generic application allows a community to have greater coDtrol over its Section
108 program and reduce the time for approval by allowing it to obtain approval for multiple projects
wilhout identifying each transaction. To obtain this advantage, Ihe community must establish, and abide
by, underwriting criteria Ihat meet Ihe approyal of Ihe HUD Central Office in Washington, D.C. Once
approval is granted, each project is reviewed at Ihe community level to insure Ihat it meets these criteria,
and Ihen reviewed at Ihe Area Office in Los Aogeles, CA to insure Ihat it meets CDBG eligibility
requirements. If halh of Ihese reviews are successful Ihe fuods can be obtained wilhout having to get funher
approval from Ihe HUD Central Office. Under Ibis type of application, only projects that do not meet the
pre-approved uDderwriting criteria must be sent to the HUD Central Office for credit approval.
Project-by-Project Application - A project-by-project application places a much larger portion of Section
108 program coDtrol in the hands of the HUD Central Office. Under this type of applicatioD, the
community prepares the package and coDducts a preliminary credit analysis in preparation for submitting the
project to the HUD Area Office in Los Aogeles, CA for a review of CDBG compliance. If the application
complies wilh CDBG requiremeDts, Ihe appliCatiOD is Ihen submitted to Ihe HUD Central Office where
CDBG compliance is verified and an underwriting analysis is perlonned to detennine the credit worthiness
of the project If approved, the funds are authorized for community access. This process can delay the
funding process since many applications will require multiple revisioDs prior to final approval, and the
process relies on the timely response from limited staff resources iD Ihe HUD Central Office.
To assist in the evaluation process the project team has prepared Table 1 showing steps involved in
each application along with the average time frame for completing each step (see Appendix A for a
detailed description of the application process). This is followed by Table 2 which shows the
opportunities and limitations associated with each type of application.
Table 1: Section 108 Application Processes - Steps and Time Frames
Generic Project-by-Project
Application Process Steps ADDlication A nnlication
Pre-submission Reauirements
1. Preparing Preliminary Application Entire Process EDtire Process
2. Fulfilling Applicable Requirement of Citizens 2 - 2.5 Months 2 - 2.5 MODthS
Participation Plan
3. Publish Proposed Requirements Community-Wide
Submission Reauirement. .5 - 1 Month .5 - 1 Month
Area Office Review
1. CDBG Compliance Review .5 - 1 Month .5 - 1 Month
HUD Central Review
Application Presents Acceptable Underwriting Criteria
1. CDBG Compliance Review I Month
2. Underwriting Analysis I - 2 Months
Deal Does Not Confonn to Pre-Approved
Underwriting Criteria
1. CDBG Compliance Review 1 Months I Months
2. Underwriting Aoalysis 2 - 5 MODthS. 2 - 5 MODthS.
.Time for analysis may vary due to incomplete applications, complicated projects requiring additiooal security, etc.
A-V Claggett Wolfe Associates
HUD Section 108: Phase 1 Feasibility Analysis Page 7
Table 2: Section 108 Application Processes - Opportunities and Limitations
Generic Project-by-Project
Opportunities AnDlication Aoolication
1. Multiple Project Approyal Without X
Identifying Each Transaction
2. Avoids Need for HUD Central Approval X
On Project Meeting Pre-Approyed Criteria
3. Shorter Time for Project Approval X
Generic Project-by-project
LImitations A nolicatioo A oolicatioo
1. Requires An Application To Be Prepared X
For Each Project Including, But Not Limited To:
Citizen Participation Plan
- Technical Assistance to Low/Mod
Citizens Assisting in Developing Proposal
Two Public Hearings
- Publishing Proposed Requirements Community-Wide
2. Requires HUD Area Office Approval For X X
CDBG Compliance
3. Requires HUD Central Approval 00 AIl Projects X
4. Requires HUD Central Approval On Projects That X
Do Not Meet Pre-Approved Criteria
/1-&1
Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page 8
SECTION 3: SECTION 108 LOAN PROGRAM OPTIONS
From a business' perspective, the process of borrowing funds can be divided into four basic areas
of concern.
1. Availabilif;y of ('4pital -- Availability of capital is obviously important. If money at any
price is not available, the business cannot access capital.
2. Eq¡¡if;y ReQj1irements -- Businesses survive according to their ability to generate cash. High
equity requirements imposed by lenders absorb scarce cash sources which the business
needs to survive and expand.
3. Monthly Payments -- High monthly payments are also a cash drain. Lower monthly
payments enhance the survival of a company and are a function of the interest rate and
maturity for any given loan amount.
4. Rate Risk -- Rate risk refers to the interest rate at which funds must be repaid. If interest
rates are fixed, the risk is known at the time the business signs the loan agreement.
However, if the interest rate is variable (or floating) the business is subject to changes in
this rate over time. If the prime interest rate increases, the business usually cannot pass on
the increased interest payments to his/her customers and must absorb the increase in
monthly payments. Conversely, he/she benefits when there is a drop in the prime interest
rate.
With these concerns in mind we can look at two fonns of lending--loan guarantees and direct
loans.
3.1 Overview of a Loan Guarantee Program
In general, loan guarantee programs are established to reduce the risk to the lender by guaranteeing
that a specified percentage of the loaned amOJ1Ilt (for example 75%) will be paid to the lender by the
guarantor should the borrower default on the loan. In these transactions there are typically three
parties; 1) the lender, 2) the borrower, and 3) the guarantor. A good example of a loan guarantee
program is the Small Business Administration (SBA) 7(a) loan program.
With a loan guarantee program a lender generally originates (i.e., collects and analyzes credit
infonnation, prepares documents, releases funds, etc.) and administers (i.e., collects payments,
handles delinquency, handles defaults, etc.) the loan. The lender must analyze the business to
detennine whether a specific project satisfies minimum underwriting standards (e.g., cash flow for
debt coverage, collateral, existing debt, available equity, etc.). To some extent, the lender will
consider the value of guarantee in this credit decision.
In the guarantee loan programs, the government body (in this case the City) must execute a
guarantee document with each participating lender and must induce lenders to participate.
Although the lender originates, services and administers the loan, the government body must
review the credit to protect its interests and monitor the portfolio.
Under Section 108, the City of Chula Vista has an opportunity to serve as a guarantor by
obligating an equivalent amount of Section 108 funds to meet the guarantee portion of the loans
made by participating lenders.
For Example:
If the City guarantres 75% of a $100,000 loan. $75,000 would be set aside ITom the City's overall
Section 108 program. If the business defaults on the loan, then the City would borrow the necessary
funds to cover its guarantee ITom the private sector using. HtJD guarantee, and then use these ñmds to
,A- 10 Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page 9
reimburse the lender for the amount guaranteed. The program is structured to allow the City to guarnntee
loans for up to 20 years (assuming the economic life of the asset fmanced is sufficient to W8JTant such a
term). The City borrows Section 108 funds at Treasury rates plus a premium of 12 to 60 basis points (a
basis point is 1/100 of a percent), depending on maturity. If a loan to the City were closed at the first of
the year in 1996, the rate would be approximately 6.5%, fixed. For the same period a conventional rate
at prime plus 2.5% would be 11 %.
Most guarantees are structured as "shared risk". IT the bOlTOwer fails to repay the loan, the loan
embarks upon foreclosure. The process of liquidation is clearly deemed in the guarantee document
as to the responsibilities of the guarantor (the City) and the lender. IT there is a loss after assets are
liquidated and personal (or other) guarantees are exercised, the lender and guarantor will share the
loss in proportion of the guarantee.
For Example:
. At the time of foreclosure the loan balance is: $100,000
. Through the liquidation of assets and exercising of personal
guarantees the lender is able to recover an ammmt of: ($40,000)
. The resulting loss is: $60,000
. With. 75% guarantee the loss is distributed as follows:
25% to the lender or: $15.000
75% to the guarantor or: $45,000
This type of shared risk structure keeps the lender somewhat honest. If they fund an unacceptable
credit risk, they still incur a loss, even if the guarantor accepts a larger loss. Obviously, it is
important for the guarantor (the City) to have established credit criteria and to review all loans prior
to approval to insure that guarantees are extended to those deals that it considers acceptable credit
risks.
Since foreclosure is expensive, time consumÍ11g and unprofitable (even if the lender recovers all of
its funds), lenders generally do not give the guarantee much weight when making their credit
decision. However, a guarantee can be significant if a deal is close to the lenders normal
underwriting thresholds. (Note: Even on a good deal, lenders usually will accept a guarantee to
hedge their risk since all the costs associated with the guarantee (e.g., guarantee fees, etc.) are
usually ttansferred to the borrower.)
3.2 Overview of a Direct Loan Program
Direct loan programs are established to move primary control over the lending decision from an
outside patty to an internal organization (or external organization under contract). By doing so the
conttolling organization has the capacity to defme loan maturities, equity requirements, interest rate
levels, interest rate type (fixed or variable--borrowing at a fixed rate from HUD and lending at a
variable rate to a boITOwer is not advocated for a large portion of the portfolio due the inherent
risks associated with potential declines in prevailing interest rates), and acceptable underwriting
criteria (related to its desired level of risk). The HUD Section 108 program provides the City of
Chula Vista with an opponunity to establish a direct lending program for economic development
activities and to support its business community.
Under Section 108, the City first borrows the funds from the private sector using a HUD
guarantee, and then re-lends those same funds to Chula Vista businesses or for targeted
development projects. The program is structured to allow the City to borrow the funds for up to
20 years (assuming the economic life of the asset financed is sufficient to warrant such a tenD)
providing the City with the opponunity to provide longer tenD fmancing. In addition, the interest
rate is fIXed and reasonable (roughly equivalent to a AAA bond issue) providing the City with an
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HOD Section 108: Phase I Feasibility Analysis Page 10
opportunity to extend competitive fixed rates of interest. The City borrows Section 108 funds at
Treasury rates plus a premium of 12 to 60 basis points (basis point is 1/100 of a percent),
depending on maturity. If a loan to the City were closed at the first of the year in 1996, the rate
would be approximately 6.5%, fixed. For the same period a conventional rate at prime plus 2.5%
would be 11 %.
With a direct lending program, the City makes its own credit detenninations and can exceed
conventional loan-te-value (LTV) ratios (slightly) for long tenn assets (assuming reasonable
creditworthiness) without significant credit risk. The City can also provide extended maturities,
lower equity requirements, reasonable interest rates, and fIXed interest rates in relation to the risk it
is willing to undertake. A successful use of alternate underwriting criteria related to LTV can be
shown with the SBA 504 program. In this case conventional lenders generally use a LTV of 75%
whereas the SBA 504 program has financed thousands of projects over fifteen years for long tenn
assets at 90%. Though they have taken a more aggressive lending position, the loss rate of SBA
504 in the San Diego region is approximately equal to that of a conventional lending institution
(approximately 2%).
3.3 Benefits of Guarantee and Direct Loan Programs
The benefits of a guarantee and a direct loan program are presented below in Table 3.
Table 3: Benefits of Guarantee and Direct Loan Programs
Guarantee Loan PrD2ram Direct Loan Program
Availabilitv of CaDi tal Beneficial in that it may increase access to Beneficial in that it increases access to
capital for deals that are close to lender's capital and creates an opportunity for the
nonnal underwriting criteria, but would not City to provide a wide range of capital
be made without a 2uaranteè. moducts to Chula Vista businesses.
Eauitv Reouirement. No benefit since lenders nonnally use Beneficial in that the City has the flexibility
established market equity requirements. to establish its own equity requirements in
relation to pre-established criteria that
remesent an accentable level of risk.
Monthlv Payments No benefit since lenders nonnally establish Beneficial in that the City has the flexibility
market rates and maturities. to provide extended maturities and rates to
lower montlùy payment in relation to pre-
established criteria that represent an
acceptable level of risk.
~ No Benefit since lenders nonnally require Beneficial in that the City has the flexibility
floating market rates of interest rate. to provide reasonable interest rate that can be
fixed or variable determined by pre-
established criteria that represent an
accentable level of risk.
In summary, the principal benefit of a loan guarantee program in Chula Vista is access to malicet
based capital while the principal benefit of a direct loan program is that it provides Churn Vista with
a wide range of opponunities to fill gaps in existing programs and meet the needs of area business.
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HUD Section 108: Phase I Feasibility Analysis Page II
3.4 Costs of Guarantee and Direct Loan Programs
The costs associated with administering guarantee and direct loan programs are influenced by a
number of factors including, but not limited to, the number of new loans made each year, the
number of existing loans in the portfolio, the sophistication of the borrowers applying for loans
(i.e., less sophisticated borrowers require more assistance in preparing the necessary infonnation
for a complete loan package), the number of loans that are delinquent or in default, and the level of
business development required to identify deals and maintain relationships with local lenders.
For the purposes of this study the project team has divided program costs into four categories:
. Technical Management - This includes the evaluation of CDBG eligibility and business
credit, document preparation, loan closing, funds disbursement, loan servicing and
portfolio management.
. Program Administration - This includes monitoring and reporting for CDBG requirements
including eligibility, adherence to national objectives, environmental, Davis-Bacon, and
appropriateness/public benefit.
. Business Development - This includes marketing and public relations activities to both the
business and lending communities.
. Workout - This includes the handling of loans that are in default including loan
restructuring and foreclosure.
Guarantee loan programs tend to be less expensive to administer than direct loan programs because
a number of the elements of technical management (i.e., document preparation, loan closing, funds
disbursement and loan servicing) are handled by the lender to which the guarantee is extended. In
addition, in the cáse of default, a majority of tPe work related to restructuring and/or foreclosure is
handled by the lender.
Costs associated with either type of program can be controlled, and possibly reduced, using a
number of different approaches. One approach, that is imponant both in tenns of maintaining the
integrity of the program and minimizing the high cost of workout, is sound underwriting and
portfolio management. A second approach that is used by many communities in both urban and
rural areas around the U.S. is contracting out for technical management, business development and
workout services. This approach allows communities to utilize the skills and resources of existing
local organizations that manage multiple loan programs and take advantage of the economies of
scale experience by having a larger portfolio of loans under management. Caution should be taken,
however, when evaluating this approach to insure that sufficient business development efforts are
directed to local businesses in Chula Vista. In either case, program administration and CDBG
compliance monitoring remains the responsibility of the City, and thus must be managed internally
even though an outside contract organization may be responsible for collecting data and preparing
reports.
The costs associated with a guarantee or direct loan program can also be offset by passing direct
costs on to the borrower (e.g., attorneys fees, costs associated with credit checks and UCC filings,
etc.), by collecting loan fees and by managing interest revenue in the case of a direct loan program.
A more detailed analysis of program costs and fees will be addressed in the program design to be
completed in Phase III of this project. However, for the purposes of evaluation, a schedule has
been developed (see Table 4) which shows the estimated costs for the fITst year of program
operation assuming a target of 6 to 10 loans.
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HUD Section 108: Phase I Feasibility Analysis Page 12
Table 4: Estimated Costs for Guarantee and Direct Loan Programs
Guarantee Loan Propram Direct Loan Propram
Starring Annual Cost Starring Annual Cost
Technical Management - .5FfE@ $40,000 1 FrE@ $80,000/yr. $80,000
CDBG Compliance, $80,000/yr. including benefits.
Credit Analysis, including benefits.
Document Preparation, Document Prep..
Closing, Funds Closing.
Disbursement, and
Disbursement, Servicing, Servicing handled by
and Portfolio Monitoring Lender.
Program Administration - Incorporated into No Additional Cost Incorporated into No Additional Cost
Program Coordination existing CDBG existing CDBG
and Reponing activities. activities.
Business Development Incorporated into $12,000 for Incorporated into $12,000 for
Markering and PR Technical Mgmt. materials and mailing Technical Mgmt. materials and mailing
Workout - Restructuring Majority of work Variable Requires special Variable
and Foreclosure handled by lender; Controlled through skills that would Controlled through
City oversight underwriting and most likely be underwriting and
required to protect portfolio obtained on a portfolio
CitY interests. mana.ement Drocess contract basis. mana.ement Drocess
Total $52,000 $92,000
3.5 Analysis of Potential Problem Areas and Risks
The problems associated with establishing HUD Section 108 loan guarantee or direct lending
programs focus on the City's ability to acknowledge and manage the risks associated with business
lending. Unlike entitlement funds or the ':grantsmanship" programs historically sponsored by
HUD, the City is obligated to pay back all borrowed funds either through its current or future
entitlement allocations. Consequently, the City puts at risk all those programs that are supported
annually with CDBG entitlement dollars.
Conventional lenders experience an average loss role of approximately 5% to
15%. These rates have been achieved through sound management and strict
underwriting criteria. 1f,for example, the City of CJIUla Vista targets a loss rate of
10%, it can manage its program and establish sufficient reserves (through loan
proceeds, entitlement dollars, etc.) to offset these losses and avoid any impacts on
the City's other CDBG supported programs.
Though this sounds ominous, the risks associated with Section 108 lending programs are
manageable. Communities throughout the U.S. have used Section 108 and managed its associated
risk by establishing and maintaining clear policies and procedures to properly manage the program.
Examples of some of these policies and procedures include:
. Defining acceptable levels of risk and establishing underwriting criteria designed to identify
deals that meet this level of risk.
. Establishing a loan approval process that operates outside the influence of local politics.
. Creating a loan review committee comprised of community representatives and qualified
lenders capable of balancing public benefits with credit risks.
. Implementing a comprehensive portfolio management system including electronic payment
transfer or payment coupon books, prompt handling of delinquencies, and annual review
of financial viability of businesses with outstanding loans.
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HUD Section 108: Phase I Feasibility Analysis Page 13
Other problem areas that must be considered include:
1. The City must provide sufficient on-going oversight to insure program success. In the case
of a guarantee loan program, the City must execute a guarantee document with each
participating lender and must induce lenders to participate. Although the lender originates,
services and administers the loan, the City must review the credit to protect its interests and
monitor the portfolio. For a direct loan program, the City must also originate, close,
disburse and service the loans as well as handle delinquencies and defaults.
2. The City must insure that the funds are used for a CDBG eligible activity, and that the use
meets a national objective.
3. The City must insure that 70 percent of all of their CDBG funds (including Section 108) are
used to benefit persons of low and moderate income. As a result, the City must take steps
to monitor the use of funds for uses such as meeting the national objective related to the
reduction of slums and blight to insure that this requirement is not violated.
4. If outside contractors are used to promote and/or administer the programs, the City must
take steps to insure that all CDBG requirements are met.
5. Due to the size and specificity of these programs, the City must take steps to insure that the
desired level of support is provided to insure that the benefits to Chula Vista's business
community are fully realized.
6. City loan programs are sometimes viewed by business owners as either grant programs
(Le., the funds do not really have to be repaid) or activities that involve a lot of "red tape".
However, these issues can be overcome through proper program design and
administration.
As mentioned above, most of the potential problem areas associated with Section 108 program are
manageable. For example, a community Can provide additional security by establishing a tax
incentive fmancing (TIP) disnict (similar to redevelopment, this disnict is established for a specific
project) and pledging the tax increment as a revenue stream to repay Section 108 debt service. If
the transaction cannot service the Section 108 from cash flow generated by internal operations, the
TIF revenue Can bridge gaps in both collateral and repayment. Other potential sources of additional
security are to pledge the income generated from existing and seasoned loan portfolios, parking
revenue, lease payments and the pledge of assets. These topics will be addressed in more detail in
the program design and documentation efforts proposed in Phase III of this project.
/I.-IS-
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HUD Section 108: Phase I Feasibility Analysis Page 14
SECTION 4: CREDIT NEEDS ANALYSIS
Chula Vista, like many California cities, is home to businesses from a number of different industty
sectors. For the purposes of this analysis special emphasis was placed on evaluating the needs of
businesses in the high-tech, biotech and environmental technology sectors along with the typical
retail, service and manufacturing business sectors that represent the mix of businesses operating in
Chula Vista. In addition, the project team worked with City staff to identify the specific needs of
Chula Vista's redevelopment areas.
4.1 Information Collection
The information used in this analysis was compiled from a number of different local and regional
sources. Using both face-to-face and telephone interviews local business owners, representatives
from public and private lending institutions serving the Chula Vista and Greater San Diego
markets, representatives from local business assistance organizations, and staff from the City of
Chula Vista Community Development and Redevelopment Departments (see Appendix B for a list
of participants) were asked a series of questions to identify gaps in existing financing programs
that might be filled with a HUD Section 108 guarantee or direct loan program. In addition,
participants were asked to give their opinion on the benefits of a Chula Vista-based loan program,
and to consider barriers or challenges that might be faced by a community-based lending program.
The infonnation gathered during this effort was then supplemented with the combined knowledge
of the project team members and their 30 plus years of experience in working with the targeted
industty sectors highlighted above as well as in community-based lending at the local, state and
federal leveL
4.2 Credit Needs of Business in Targeted Industry Sectors
The credit needs of businesses in the high-tech, biotech and environmental technologies industty
sectors are highlighted below.
High-tech
The tenn high-tech is a catch all phrase for businesses in a wide range of industries
including computers and electronic equipment, software, multi-media, telecommunications,
networking and many others. To properly address the needs of all the businesses in the
category would go well beyond the scope of this effort. However, general fmdings indicate
that early-stage companies in this sector have a need for seed equity capital and start-up
debt capital in the range of $20,000 to $250,000 to finance working capital (includes
staffing and marketing), research and development, equipment, tenant improvements,
prototype development, and product manufacturing and packaging. In addition, this sector
has a need for specific need for contract and purchase order fmancing.
Later-stage companies in this sector have similar needs in terms of use of funds with capital
requirements ranging from $500,000 to $5,000,000 most of which is provided from
Venture Capital, Investment Banking and other private sources. Real estate related needs
for this sector are limited to tenant improvements for office, R&D, and assembly space
since a majority of the manufacturing in this sector is conducted outside the United States.
Smaller technology focused businesses may purchase facilities, but the evaluation of these
deals focus more on the strength of the company versus the specific nature of their
business. Due to the speculative nature of this sector, a majority of the business financing
is provided in the form of equity, and debt fmancing from private institutions is limited to
those institutions with technology specialists such as Silicon Valley Bank.
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HUD Section 108: Phase I Feasibility Analysis Page 15
Biotech
The credit needs of the Biotech industry sector are very similar to those of the high-tech
sector with two exceptions: 1) a majority of Biotech fmns require a substantial capital
investment in specialized lab equipment, etc. with funding needs usually ranging from
$2,000,000 to $5,000,000; and 2) passive capital (capital with an extended period before
repayment) is needed for a longer period of time due to the extensive FDA approval process
(3 to 8 years) and the market penetration period after the product is introduced. Some
exceptions do exist for a small sector of products--reagents, test kits, veterinary and
agricultural products not requiring FDA or USDA approval--where $50,000 to $100,000
dollars may be useful for the purchase of smaller pieces of equipment However, the
industry specialists and lenders interviewed during this effort indicated that of the
approximately 1,200 Biotech finns in the U.S., less than a dozen are generating positive
cash flow, thus making this sector primarily the realm of equity financiers.
Environmental Technologies
The credit needs of the environmental technology sectors are difficult to detennine since
this sector has yet to gain recognition within the business community. Currently, the sector
is comprised of segments of other established sectors such as recycling, hazardous
materials transport and remediation, transportation and alternative fuels, electronic
measuring equipment, etc. Consequently, the needs of this sector are similar to both the
high-tech (discussed above) and manufacturing (discussed below) sectors both at the early-
and later-stages of development
Manufacturing
A fourth sector that was evaluated was manufacturing. This sector has specific capital
requirements to finance equipment, in.ventory and working capital. In addition, this sector
is most likely to need capital to purchase or improve real estate. Capital requirements
ranged from $50,000 to $250,000 for equipment and working capital. Specific capital
requirements for real estate purchases or improvements ranged from $200,000 to
$10,000,000.
4.3 Credit Needs of Businesses in Redevelopment Areas and the Border
Environmental Business Cluster
The credit needs of businesses located in the City's redevelopment areas and the Border
Environmental Business Cluster (BEBC) are highlighted below.
Redevelopment Areas
Based on input from City staff, and discussions with redevelopment area businesses, the
principal businesses in need of capital fall into the retail, restaurant/entertainment and
service sectors. Specific needs are for start-up and existing companies to finance working
capital, tenant improvements, equipment and inventory. Capital requirements ranged from
$10,000 to $500,000.
In addition to capital for specific businesses, City Redevelopment staff indicated that there
was a need for capital to assist business and local development efforts with infrastructure
improvements, land assembly, and targeted development efforts: Redevelopment Areas
typically exhibit visible signs of distress such as vacancies, deteriorated structures and
under utilized properties. Influenced by these outward signs, one fmds a lack of confidence
by the investment community, and as a result. properties in redevelopment areas are
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HUD Section 108: Phase I Feasibility Analysis Page 16
frequently difficult to finance and reflect reduced values. Since a HUD national objective is
the elimination of slums and blight, Section 108 can provide incentive financing for the
establishment of new businesses, the expansion of existing ventures and the rehabilitation
of propeny.
BEBC
The needs of BEBC businesses were similar to those outlined for the high-tech sector
above. In addition to the basic needs for working capital (including staff and marketing),
equipment, product packaging and inventory, one of the tenant businesses also expressed a
need for contract and/or purchase order financing specifically targeted towards government
grants and contracts. The capital required by businesses in the Cluster ranged from
$10,000 to $250,000.
4.4 Summary of Credit Needs for All Sectors
As noted in the previous sections, the high-tech, biotech and environmental industry sectors had
similar credit needs--although the biotech industry capital requirements were substantially higher
than the others, and were primarily needed to finance research scientists, lab technicians and
specialized laboratory equipment When looking at the area or program specific needs of
businesses in Chula Vista, the predominant need was for financing for working capital, tenant
improvement, inventory and equipment.
The analysis conducted for this effon revealed that the primary credit needs of businesses in Chula
Vista fall into four categories: 1) financing for well established, creditWonhy companies that
require funds that are higher or lower than the lending limits associated with established loan
guarantee programs such as the SBA 7a and 504 programs; 2) financing for "near bankable"
businesses that have an established track record, but do not quite meet the cash flow requirements
or have sufficient collateral to meet the lending standards established by the San Diego Region's
existing private and government supported lenders; 3) bridge financing for new and existing
businesses to provide the necessary capital to fulfill purchase orders, purchase materials for
contracts or initiate activity pending the release of grant funds; and 4) stan-up capital for new
businesses in all industry sectors. The needs listed above are presented in increasing order of their
risk to the lender (i.e., item 1 being the lowest risk and item 4 being the highest risk). An
additional need that was raised by a limited number of respondents was financing for nonprofit
organizations in the areas of real estate and bridge financing betWeen grant awards and funds
disbursement. This need is real, but does not meet the economic development focus of this effort
and will not be addressed funher in this study.
It must be noted that the respondents wha participated in th£ interviews conducted during this effort
identified start-up capital as th£ number one need in Chula Vista as well as th£ San Diego Region.
In lh£ir opinion. capital was available to meet the needs of the areas less risky ventures. (see
Section 5 for a description ofth£se sources).
In addition to the four primary needs outlined above, tWO respondents indicated a need for
financing to assist in the rehabilitation of Chula Vista's downtown area, to purchase/renovate
commercial structures, and to develop new commercial propeny. Although few respondents
identified these areas as high priority needs, the experience of the project team, combined with
discussions with City staff, indicated that this is also an area of unmet need
Two, non capital, needs were also identified by respondents. The [¡rstconcerned the need for
technical assistance to accompany loans made to new and emerging business. The focus of this
need was to increase the chances of business success, and thus, loan repayment, by providing
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HUD Secûon 108: Phase I Feasibility Analysis Page 17
technical assistance in the areas of fmancial management, business planning and accounting to loan
recipients.
The second, non capital, need was concerned with an understanding of existing loan programs and
the lending process. Due to the number, and complexity, of the existing loan programs serving
Chula Vista, respondents indicated that they were unaware of a number of programs, that the ones
they were aware of were somewhat confusing in tenns of qualifying criteria, and that the
application process was burdensome. Though the lack of experience in obtaining financing makes
these types of comments a common OCCUITence when dealing with small businesses, this same lack
of experience indicated a need for a locally based marketing effon to improve program utilization, a
locally based pre-qualification program to help businesses weed through the various programs, and
a training program to educate business owners on the lending process.
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HUD Section 108: Phase I Feasibility Analysis Page 18
SECTION 5: SOURCES OF BUSINESS CAPITAL
Chula Vista and the San Diego Region have one of the most diverse sets of private and public
lending sources in the country. The area is well represented by major lenders such as Union Bank,
Bank of America and Wells Fargo Bank who have a variety of lending products, and who
participate in a number of the federal and state loan guarantee programs. Chula Vista is also seIVed
by independent banks including Grossmont Bank and Pacific Commerce Bank whose primary
customer base consists of small to medium sized businesses. However, when looking at private
sector lending it must be understood that lending institutions, like most businesses, have targeted
markets they address, and each one focuses its business development efforts on specific types and
sizes of businesses as well as specific loan sizes. These targets, as well at the capacity to lend, are
based on many different factors including the experience of the institution's staff with particular
industry sectors, cum:nt market conditions, the strength or weakness of the institUtion's cum:nt
loan portfolio, the institution's legal lending limits, the profitability of the institution and other
internally established criteria. As a result, at a given time or within a given industry, one lender
may turn down a loan applicant while another will provide the same applicant with fmancing.
In the realm of public lending sources, Chula Vista has the advantage of being seIVed by 13
different programs. These include a combination of 7 guarantee programs, 5 direct loan programs
and 1 reserve fund program. A matrix outlining the specifics of each program is presented in
Appendix C followed by a detailed summary of each program in Appendix D. A breakdown of
these programs is detailed below.
. Financing is available in the fonn of tenn loans, lines-of-credit and standby letters of credit.
. Loan sizes range from $300 to $750,000.
. The minimum number of years of operation required by area programs included:
- 5 programs willing to consider funding start-ups;
- 1 program willing to consider I¡usinesses that have been in operations for 6 months Or
more;
- 10 programs willing to consider businesses that have been in operations for one year
or more; and
- all programs willing to consider businesses that have been in operations for three
years or more.
. The range of allowable uses of funding included:
- 8 programs willing to fund real estate (though some have restrictions as identified in
Appendix C);
- 9 programs willing to fund inventory;
- 9 programs willing to fund working capital;
- 3 programs willing to fund business acquisitions;
- 3 programs willing to fund accounts receivable;
- 3 programs willing to provide contract and/or purchase order financing;
- 1 program willing to fund prototype development; and
- 1 program willing to fund debt consolidation.
. Most programs provided both fIXed and variable rate financing depending on the deal.
Specific underwriting criteria were not available for most programs and, as a result, were not
included in this analysis. The information that was obtained indicated basic requirements for an
ability to repay the debt as well as a strong potential for success. Other requirements such as
collateral, debt to equity ratios, etc. varied by deal within each program and could not be clearly
defmed for the purposes of this study.
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HUD Section 108: Phase I Feasibility Analysis Page 19
SECTION 6: FINDINGS AND RECOMMENDATIONS
6.1 Findings
As with most areas, the credit needs of the Chula Vista business community are varied. Financing
to meet many of these needs is currently available through the abundance of local programs
discussed in Section 5. However, the Chula Vista business community is under served by a
nwnber of these programs either as a result of a lack of awareness on the part of Chula Vista
business owners, a lack of focused program marketing in O1ula Vista on the part of lending
organizations and/or a reluctance of local lenders to participate in the programs (this is specifically
related to the guarantee programs). These findings are based on infonnation provided by area
business owners, local private lending institutions, and local nonprofit lending institutions
administering community based and government programs. Due to the complexity of the SBA
database and a lack of staff resources, the SBA indicated that it would be difficult to get a listing of
loans made by private lending institutions in Chula Vista. Consequently, this infonnation was not
obtained for this analysis. In addition to business lending, the City also lacks sufficient financing
options to support its economic development (i.e., business attraction, retention and fonnation
efforts) and redevelopment efforts.
One source that was actively used in Chula Vista was the SBA 504 program for real estate
purchases. However, a majority of these loans were in excess of $1,400,000, thus indicating a
potential need for additional funding support below this level. Once again, these fmdings may be a
result of a lack of awareness on the part of Chula Vista business owners and/or a lack of focused
program marketing in Chula Vista on the part of the community and lending organizations.
In general, small and medium sized businesses only have limited access to private capital markets.
Insurance companies and pension funds usually want large transactions (minimwn of $10 million)
and gravitate to rated companies or deals with low risk. Accordingly, most "middle market"
concerns must attempt to secure financing from commercial lenders. The primary source of funds
for commercial banks are short teI1Il deposits whose interest rate varies over time. Consequently,
banks lend money for relatively short maturities, with floating rates and at market interest rates.
These private loan teI1IlS are necessary to enable the lender to protect its interests but only a small
portion of companies can absorb this level of risk and cost of funds. Section 108 not only
provides availability of capital but also extends maturities consistent with the economic life of the
asset being financed, provides a fIXed interest rate and has an interest rate that only the highest
rated, publicly traded companies can secure. The traditional SBA and state programs try to address
these issues but there are gaps in their utilization by businesses within the corporate limits of the
City of Chula Vista.
Another, non credit related fmding that resulted from this effort was the across the board
endorsement of a need for technical assistance to small businesses receiving funding. Specifically,
interview participants as well as the project team have seen a need for both accounting and fmancial
management assistance to help these businesses manage their daily operations as well as the new
funds they receive. In addition, assistance in general business management and marketing were
found to be useful to assist these businesses as they begin implementing the expansion plans for
which the borrowed funds are intended.
In general, there is a need in Chula Vista for:
. a rock program for business, real estate and development finíuicing that provides an
additional source of capital to fill gaps in existing programs, and to address deals not
served by existing programs;
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HUD Section 108: Phase I Feasibility Analysis Page 20
. a focused effort to market existing and proposed lending programs to Chula Vista's
business community;
. a qualified individual--deal maker--experienced in business and development financing who
can make deals work in ChuIa Vista using the wide range of products available; and
. a strong technical assistance component that is tied to loans made to small, less
sophisticated businesses.
6.2 Recommendations
Due to the nature of this analysis, recommendations have been prepared for the following areas:
. Need for a Loan Program
. Section 108 Applicability
. Guarantee Loan Program vs. Direct Loan Program
. Section 108 Application Process
. Underwriting Criteria
Each of these areas is addressed separately below.
6.2.1 Need for a Loan Program
Based on the fmdings outlined above and in the previous sections, the project team recommends
that the City of ChuIa Vista proceed with the establishment of a HOD Section 108 loan program.
The program should target specific niches for business, real estate and development financing to
provide capital to fill gaps in existing programs and to address deals not served by existing
programs.
Specific uses of a Section 108 loan program will be developed in detail during the program design
phase included in Phase III of this project. Ifowever, the following are examples of how Section
108 may be used to support the City of Chula Vista's business community, and economic
development and redevelopment activities.
. Gap fmancing to enhance existing programs such as the EMTEK Fund, Bankers mc
Programs, CEDU Co-Lending Program and Accion Program by extending maturities,
providing capital for larger transactions and providing more favorable interest rates. The
program can address working capital, equipment, inventory and business acquisition loans
not served by these programs.
. Creative financing to provide capital for conttacts and purchase orders.
. Enhancements to SBA 504 lending to fill niches that are not filled (or that are difficult to
fill) with this program, such as:
- Smaller Projects -- The minimum SBA 504 portion (40% of cost) is $50,000. This
translates into a $125,000 project cost in a typical transaction. Section 108 could fund
projects less than $125,000; moreover, the median transaction in Chula Vista is
CUITently in excess of 10 times the minimum threshold.
- Larger Projects -- The maximum SBA portion can equal $1,000,000 if the project
meets special requirements. As project costs exceed $2,500,000, the SBA maximum
share is less than 40%. Section 108 could fund the difference up to 40%.
- Industrial Revenue Bond Projects -- It is difficult to combine SBA financing with tax-
exempt issues. Section 108 can subordinate to Industrial Revenue Bonds (IRB's).
- Purchase Money Mortgages -- It is also difficult to combine seller fmancing with SBA
504. Unlike SBA, HOD has no similar restrictions.
- Working Capital Portion of a 504 Deal-- Working capital is not an eligible project cost
under SBA 504. Section 108 can finance working capital.
,4- tit d- Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page 21
- Mixed Use Projects -- It is difficult to finance mixed use projects with SBA 504.
Section 108 is more flexible in this regard.
- Developer Deals -- The SBA 504 program cannot finance developer (income producing
properties) deals such as a neighborhood shopping center, industrial parks, leased
space, etc. These projects are eligible under Section 108.
- Projects Requiring Flexible Payments -- The tenDS of Section 108 are more flexible
than SBA 504. Payments in the early years can be interest only or added to the project
cost. In addition, the City can subsidize the rate if the project poses sufficient economic
and social benefit.
. Enhancements to City Redevelopment efforts.
- Section 108 can be utilized to assemble land sites, complete site improvements
including infrastructure, undertake demolition of existing dilapidated structures and pay
relocation costs. Communities have used the program to complete industtial parks,
construct incubators or to assemble land, improve it and sell the end product to a
developer or entrepreneur.
- For mixed use projects in redevelopment areas or retail areas, Section 108 can fund
housing rehabilitation in addition to commercial applications.
- To revitalize redevelopment areas, Section 108 funds can be used to rehabilitate
publicly owned property which can visibly demonstrate confidence and public
investment in a redevelopment area.
In addition, the project team recommends that the City of Chula Vista establish a City controlled
mechanism for marketing existing lending programs to local businesses, and help pre-qualify
applicants prior to turning them over to the appropriate lending organization. The City of Chula
Vista should also insure that a technical assistance component is established to support new and
emerging businesses that receive funds from existing and proposed lending programs.
6.2.2 Section 108 Applicability
The Section 108 program is a well seasoned program with over 600 approvals of loan applications
already in place in communities across the country. The program is a viable vehicle for creating
jobs in Chula Vista by leveraging capital to stimulate business fonnation and expansion, to provide
incentives to businesses evaluating Chula Vista as a place to locate, and to support the City's
general economic development and redevelopment efforts.
In addition to there benefits, HUD Section 108 program funds do carry with them the same
resttictions associated with CDBG entitlement funds regarding the meeting of a national objective,
compliance issues, Davis-Bacon, etc. It is also important to remember that contrary to the CDBG
Entitlement Program, HUD Section 108 program funds must be repaid.
As mentioned earlier in this report, the risks associated with Section 108 funds can be minimized
with proper program planning and administration including loan tmderwriting and portfolio
management. The principal role of the City is to define the level of risk it wishes to accept and to
structure the program accordingly.
6.2.3 Guarantee Loan Program vs. Direct Loan Program
As mentioned earlier, the City of Chula Vista is well served by seven guarantee loan programs and
five direct loan programs. At first glance a guarantee loan program seems like a logical option for
Chula Vista because of its lower cost of operation and benefit of not having to draw down funds
from HUD unless a loan goes into default. However, the following findings have lead the project
team to not recommend a guarantee loan program for Chula Vista.
/1..;13 Cloggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page 22
. There appears to be sufficient guarantee capacity to fill the credit needs of the businesses of
Chula Vista. Efforts to increase the use of existing programs through City controlled
marketing effons will provide greater benefit to the local business community than will the
creation of an additional program.
. As described in the benefits of each loan type, availability of capital is the primary benefit
of a guarantee program. The borrower must pay market rates, take a significant amount of
cash from potential sources of working capital to satisfy the equity requirements, pay the
loan back over short or intennediate maturities, and incur the volatility of floating rates.
Without the ability to influence these factors, and with the availability of capital through
existing programs, there is little benefit to establishing an additional program.
. The lending community indicated that they would be reluctant to participate in another
guarantee program specifically targeted for Chula Vista business due to the availability of
existing, established guarantee programs, and the complexity of negotiating agreements and
managing the program internally (usually a 6 month effort by their corporate legal staff).
. The mechanics of establishing a loan guarantee program with Section 108 are difficult. If
the guarantee is funded, the City will not be able to invest the funds in risk free instruments
(Treasuries) which will cover the interest rate on the Section 108 debt since Section 108 has
an interest rate 1/8% to 5/8% over Treasuries. In addition to the negative arbitrage, the City
will incur rate risk on the invested amount when the guarantee is called. Consequently, the
market value of the investment may be less than the original par amount (It could be worth
more, depending on the direction of interest rates.) Even if the lenders allow the guarantee
not to be funded, the Section 108 authorization is only valid for two years and must be
renewed after its expiration.
The project team does recommend that the City of Chula Vista establish a direct loan program using
HUD Section 108 program funds. The recommendation is based on the following findings.
. Niche opportunities exist to fIll gaps in current financing programs as described in Section
6.2.1.
. The City can provide incentives aÎ1d exert greater control over a direct loan program
because it can influence interest rates, loan maturities, equity requirements and collateral
requirements to meet its desired public benefit and economic development objectives while
still achieving its desired level of risk (e.g., a portion of the portfolio can be allocated to
low risk deals, moderate risk deals and higher risk deals).
. The City has a greater opportunity to recover its costs through fees and interest revenue.
6.2.4 Section 108 Application Process
The City of Chula Vista has a unique opportunity to leverage capital by utilizing the HUD Section
108 program. Based on the analysis performed for this effort, the project team recommends that
the City continue its efforts to submit a HUD Section 108 application. The project also
recommends that the City prepare a generic application for the following reasons: 1) approval of a
generic application provides the City with approval for multiple projects without identifying each
specific transaction thus reducing staff time related to application preparation for each project; 2) a
generic application provides the City with the greatest flexibility to respond to specific funding
requests within a pre-established set of underwriting criteria (see Section 6.2.5); 3) a generic
application reduces the time for approving specific funding requests by avoiding the need for the
second stage of approval by the HUD Central Office in Washington, D.C.
6.2.5 Underwriting Criteria
HUD is currently establishing underwriting guidelines for both user and developer projects for
low, moderate and high risk transactions through the use of Price Waterhouse as a consultant, and
/I-,;Lý Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page 23
local practitioners as an advisory committee. As yet, the advisory committee has not been named
and HUD is reviewing drafts prepared by Price Waterhouse.
At present, the Office of Management & Budget (OMB) has established a loss reserve for the
Section 108 program at 2.1 % of the total authorization as part of the Credit Refonn Act HUD is
considering several options as to how the loss rate will be applied, but has not announced any
decisions.
Generic application underwriting criteria include guidelines which state that the maturity of the loan
cannot exceed the useful life of the asset(s) financed; that projected cash flow must be available for
debt coverage (indicating an ability to repay); and that the value of collateral (real estate, maclùnery
and equipment, inventory, etc.) must be sufficient to secure the loan. Traditionally, HUD has used
an 80% loan to value and a 1.15 debt coverage ratio as underwriting guidelines and as a baseline in
establishing additional security requirements. In filing the generic application, additional language
must be included that indicates the evaluation of the adequacy of working capital to cover
operations and debt; the adequacy of the balance sheet; the experience of the management team; the
requirement of guarantees; and the character of the borrowers.
The Consulting Team will expand the underwriting criteria in Phase III based on further discussion
with City staff to detennine a level of risk that is acceptable to the City.
/I-.l. ~ Claggett Wolfe Associates
Appendix A
A -.;l G. Claggett Wolfe Associates
HUD Section 108: Phase 1 Feasibility Analysis A-I
Section 108 Application Process
The Section 108 application is a three step process: 1) pre-submission requirements, 2)
HUD Area Office review and 3) HUD Central (Washington, D.C. Office) review.
Pre-submission Requirements
Prior to submitting a Section 108 application, the City of Chula Vista must comply with
specific HUD requirements. If incorporated into the City's nonnal CDBG process, these
items should not require substantial additional effon. Pre-submission requirements
include:
1. preparing an application outlining community development objectives and intended
activities to be funded along with a description of the City's pledge of CDBG as
security;
2. fulfilling applicable requirements (as required by CDBG) in its citizen participation
plan which include timely notice of meetings, access to records, provision of
technical assistance to low and moderate income citizens requesting assistance in
developing a proposal, and two public hearings. Meetings must address needs of
non-English speaking citizens. Efforts must also provide opportunities for citizens
affected by the activity to comment, include responses to complaints and
grievances, and encourage citizen participation, and
3. publishing proposed requirements community-wide.
Submission Requirements
Once the pre-submission requirements are met, the City must prepare a final application
which includes a description of how activities meet a national objective(s), an outline of the
proposed repayment schedule and sources of repayment, a certification that the community
can pledge grants, a certification that the HUD guarantee is necessary to carry out activities,
and documentation for other HUD certifitations (i.e., drug-free workplace, debannents and
suspension, anti-lobbying statement, community legal authority to submit application,
authorized person as official representative, compliance with pre-submission requirements,
funher fair housing, compliance with 70% Low-Mod rule, and compliance with relocation
and displacement provisions of 570.606).
Area Office Review
Once the application has been submitted, the HUD Area Office reviews the application
primarily for compliance with Section 108 eligibility regulations prior to sending it to the
HUD Central Office for final approval. The issues addressed by the Area Office include
detennining whether all program requirements are being met, including:
1. submission by an eligible community;
2. proceeds will be used for eligible activities;
3. a national objective(s) will be met;
4. fund request is less than five times CDBG annual entitlement allocation;
5. compliance with Davis Bacon;
6. compliance with the 70% Low-Mod rule;
7. appropriateness criteria (including public benefit) are specified;
8 . compliance with environmental review;
9. compliance with relocation and displacement provisions (570.606);
10. other certifications as outlined above.
/I-d' Cloggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis A-2
If all of these requirements are met, the Area Office forwards the application to the HUD
Central Office for final approval.
HUD Central Review
The HUD Central Office verifies the eligibility and underwrites the transaction. If the
pledge of CDBG entitlement is insufficient to address the risk of the project, HUD may
require the community to pledge additional security.
The HUD Office review will result in one of three likely outcomes: 1) HUD will approve
the application, 2) HUD will not approve the application, or 3) HUD will approve a lesser
amount than requested.
A generic application is one that receives approval for multiple projects without identifying
each specific transaction. The community enumerates specific underwriting standards by
which it will approve loans. Although each loan must confonn to these standards, the
community only has to receive Area Office approval for eligibility as they identify each
individual project. Consequently, the community can avoid the second stage of the
approval process since HUD has already approved the underwriting standards.
If a community decides to finance a deal that does not meet the underwriting standards
included in the generic application, the community must submit the deal using the project-
by-project application process and submit the deal for approval at HUD Central.
A -c2 {f Claggett Wolfe Associates
Appendix B
A -:l 9 Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis B-1
The following individuals participated in the interview process conducted for this effort.
Business Owners
Martin Calvo, TQM, Inc.
Jeff Colborn, Metallic Power, Inc.
Tye Compton, Tyco Propeny Management
Jim Ghashghaee, Career Cap Corporation
Daryl Ohlau, Chocolate Maker
Rich Powell, Nellcor
Chuck Sutherland, Goldcoast Engineering
Public and Private Lending Institutions
Linda Buchner, Grosmont Bank
Bruce Carlin, Neilsen Capital Group and Western Regional Bioprocessing Center
Lee Fenn, Bankers Small Business Community Development Corporation
Art Goodman, CDC Small Business Finance
Mike McGraw, California Southern Small Business Development Corporation
Villa Mills, Accion
John Munch, Union Bank
Steve Siemers, Grosmont Bank
Dennis Warner, Pacific Commerce Bank
Business Assistance Organizations, City Staff and Industry Specialists
. Ned Ardagna, Border Environ¡nental Technology Resource Center
. Pam Buchan, City of Chula Vista Redevelopment Agency
. Victor Castillo, Southwestern College Small Business Development &
International Trade Center
. Ken Clark, Southwestern College Small Business Development & International
Trade Center
. Richard Degiman, Silicon Valley Bank
. Cheryl Dye, City of Chula Vista
. Peter Hanley, Institute for the Future (High-tech and Biotech Specialist)
. Barbara Harley, Harley Consulting (Biotech Specialist)
. Lyle Haynes, City of Chula Vista Redevelopment Agency
. Mike Jenkins, City of San Diego
. Mark Johnson, City of San Diego
. William Snyder, Border Environmental Business Cluster
. Curtis Valenzuela, City of Chula Vista Community Development Department
. Mary Wylie, Southwestern College Small Business Development &
International Trade Center
A -3<J Claggett Wolfe Associates
Appendix C
,//- .3--1 Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis C-l
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HUD Section 108: Phase I Feasibility Analysis C-2
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BUD Section 108: Phase I Feasibility Analysis C-3
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Appendix D
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A -.35. Cloggett Wolfe Associates
.California Capital Access Program
Program Overview
California Capital Access Program (CAP) is a partnership between the state and financial
institutions designed to increase the availability of loans to "near-bankable" small businesses in
California. The program is designed to provide a fonn of loan portfolio insurance by establishing
a special reserve fund consisting of premiums paid by the borrower and lender, as well as a
matching contribution from the state.
While CAP is a publicly administered program by the California Pollution Control Financing
Authority (CPCFA), the loans remain private transactions between the borrowers and the lenders.
Banks and savings and loans participate by first establishing a reserve account through the CPCF A
which is used to handle premiums paid by the lender, the borrower and the state. After making a
loan to a qualified small business, the lender submits a simple one page loan fonD to CPCFA
describing the transaction and deposits its reserve payment, along with the borrower's, into the
reserve fund account. Within 10 days of receiving notice of the loan, CPCFA deposits its
matching contribution into the account. In the event of a loan default, the reserve fund may be
used to cover the loss. If the loss exceeds the amount in the fund, the lender absorbs the risk.
Program Type - Reserve Fund
Applicants Characteristics - Detennined by Lender (applicants must meet eligibility
requirements outlined below)
Loan Type - Lines of Credit, Tenn Loans
Maturity - Detennined by Lender
Interest Rate - Detennined by Lender
Matching/Equity Requirements - Not Applicable
Fees - Detennined by Lender (see below for reserve contribution)
The reserve account will be comprised of, at a minimum, 2% of the loan amount (from the
bOtTOwer's portion of loan proceeds), 2% in matching funds from the lender, and 4% in
matching funds for the CPCF A. The maximum premium payment that a lender may require of
a borrower is 3.5% of the loan amount, resulting in a 3.5% match requirement from the lender
and a 7% match from the state.
Prepayment Penalty - Detennined by Lender
Collateral Requirements - Detennined by Lender
Lending Limits
Minimum - Not Specified (Detennined by Lender)
Maximum - $2.5 Million over a 3 year period (program restricts amount that can be
contributed to a loan loss reserve account to $100,000 for a single borrower
A-oU. Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page D-2
or group of bOITowers with a common enterprise in any 3 year period.
Lender can enroll a loan amount for less than the full amount of the loan.)
Eligible Uses
Real Estate Yes (see eligibility requirements and restrictions)
Machinery & EquiDment Yes (see eligibility requirements and restrictions)
Inventory Yes (see eligibility requirements and restrictions)
Workin!! Capital Yes (see eligibility requirements and restrictions)
Other None
Eligibility Requirements
. Qualified business must be a corporation, partnership, cooperative or other entity, private
or nonprofit, that is authorized to conduct business in California.
. The bOITOwer's primary business location must be in California. For borrowers with
multi-state operations, the guiding principle to determine eligibility will be economic
impact.
. The primary economic impact and benefits of the business activity financed by the CAP
loan must be in California.
. The qualified bOITOwer's business operations must affect the environment of the state as
determined by a list of qualified SIC Codes.
. Lenders using CAP proceeds are subject to all state and federal laws governing restrictions
on insider transactions.
Restrictions
Program loans can be used for real estate, but cannot be used for construction or purchase of
residential housing; or for the purchase or construction of "passive real estate" or real estate owned
for the purpose of deriving income from speculation trade, rental or ownership that is not intended
to be used for the present and/or future business operations of the borrower. The borrower must
use or plan to use at least 51 % of the space in an existing building acquired or renovated by a
Program loan, and at least 67% of the space in a newly constructed building.
Program loans cannot be used for the refinancing of loans not originally enrolled under the
Program unless such financing increases the outstanding balance of the loan to be refinanced, in
which case the Program will only cover the new amount.
Program loans cannot be used for loans which would cause the interest on any tax-exempt bonds
issued by the Authority to be subject to federal income tax. TIús restriction prohibits loans to:
Any private or commercial golf course, country club, massage parlor, tennis club, skating
facility (including roller skating, skateboard, and ice skating), racquet spons facility
(including any handball or racquetball COlin), hot tub facility, suntan facility, racetrack,
airplane, sky box (or other private luxUty box), health club facility, facility primarily used
for gambling, or store whose principal business is the sale of alcoholic beverages for
consumption off premises.
A-3; Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page D-3
Other Program Information
To encourage participation, the state will contribute 50% more than noI1I1al on a loan to the reserve
accounts of the flfst $500,000 in loans made under the program by each bank.
When a loan is made to a qualified business located in a severely affected community, CPCFA will
contribute an additional 50% of the premium payments made by the b<JITower and lender combined
to the reserve.
/1- ~f Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page D-4
EMTEK Fund
Program Overview
The City of San Diego, in conjunction with the federal Economic Development Administration, has
established the EmTek fund to provide fmancing to businesses that promote job creation and
retention in San Diego County and that assist in the diversification of the local economy.
Businesses with a technology focus or defense conversion element, either by employing fonner
defense industry personnel or applying defense industry technologies in the commercial sector, are
the targets of this program.
Program Type. Direct Loan Program: Revolving Loan Fund
Applicants Characteristics - For Profit Business - Start-up through Existing Businesses
(applicants must meet eligibility requirements outlined below)
Loan Type - Tenn Loans
Maturity - 5 Years or less
Interest Rate - Both fixed and floating - detennined on case-by-case basis
Matching/Equity Requirements - 1 to 1 of private capital and/or other program financing
Fees - Detennined by Lender (see below for reserve contribution)
The reserve account will be comprised of, at a minimum, 2% of the loan amount (from the
borrower's portion of loan proceeds), 2% in matching funds from the lender, and 4% in
matching funds for the CPCF A. The maximum premium payment that a lender may require of
a boITOwer is 3.5% of the loan amount, resulting in a 3.5% match requirement from the lender
and a 7% match from the state.
Prepayment Penalty - Varies
Collateral Requirements - Detennined by Lender
Lending Limits
Minimum - $50,000
Maximum - $100,000
Eligible Uses
Real Estate No
Machinery & Eauipment Yes (see eligibility requirements and restrictions)
Inventory Yes (see eligibility requirements and restrictions)
Working Capital Yes (see eligibility requirements and restrictions)
If -8' Cloggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page D-5
Other Contract Financing, Prototype Development and Testing
Eligibility Requirements
. Business must be located in San Diego County.
. Bon-ower must show an ability to repay the loan as well as strong potential for success.
. Borrower must be unable to obtain conventional financing.
. Applicants must provide a business plan and complete financial information.
. Signed purchase orders are necessary for EmTek conttact financing.
Restrictions
Program loans cannot be used for real estate or used in conjunction with Industrial Development
Bonds.
Other Program Information
None
/I _40 Claggen Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page D-6
Banker's Small Business CDC of San Diego
Term Loans to Business (TLB) Program
Program Overview
The Banker's Small Business Community Development Corporation (BSBCDC) was established
to provide f"mancing in the fonn of micro loans and equity gap guarantees to meet the needs of the
small businesses in San Diego County.
The micro loan program provides flexible "gap f"mancing" which on a project-by-project basis will
f"ùl the gap between the amount of financing available from conventional sources and the amount
available from the SBA and other government sources.
Equity gap guarantees are provided in the fonn of stand by letters of credit to fulfill equity
requirements of SBA or State of California guarantee loan programs.
Program Type - Direct Loan Program: Revolving Loan Fund
Applicants Characteristics - For Profit Business - In business 1 or more years. Preference
will be given to minority and women owned businesses, and to
businesses located in Enterprise Zones and low and moderate
income and minority areas. (Applicants must meet the
eligibility requirements outlined below)
Loan Type - Tenn Loans
Maturity - Maximum 3 years with up to 5 year amortization.
Interest Rate - Prime plus 3.5% fixed for te'nn (may use floating rate for specific credits)
MatchinglEquity Requirements - Not Specified (designed as "gap financing")
Fees - 3% Loan Fee; $250 Application Fee (payable in advance - non-refundable); borrower to
pay all out-of-pocket costs. Cost and fees may be financed.
The Loan Committee may, at its discretion, require a borrower to pay an additional
payment of interest/fee based upon the risk of the credit and the potential success of the
business. This additional interest/fee has a maximum 10% cap of the original loan amount
during the life of the loan, and is payable annually based on a percentage of increase in the
borrower's gross revenues. The sales level and f"mancial statement/infonnation "basis" for the
additional interest/fee is detennined at the inception of loan committee.
Prepayment Penalty - None
Collateral Requirements - Same as generally accepted by comparable SBA loan guidelines.
Lending Limits
Minimum - $2,500
Maximum - $50,000
A- 4(
Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page D-7
Eligible Uses
Real Estate No
Machinerv & Equipment Yes (see eligibility requirements and restrictions)
Inventory Yes (see eligibility requirements and restrictions)
Working Capital Yes (see eligibility requirements and restrictions)
Other None
Eligibility Requirements
. Business must be located in San Diego County.
. Business must be open and operating for a minimum of twelve months with positive profit
and cash flow trends covering the most recent six-month period.
. Borrower must meet basic SBA credit guidelines.
. Borrower must have:
- good character,
- show the ability and experience (or comparable) to operate a business of the type, size
and scope successfully and profitably;
- sufficient invested capital (not loaned--unless subordinated) so that with a TLB
program loan the business can operate on a sound basis;
- historical earnings and cash flow record together with future projected financial trends
that are sufficient to repay loan and to provide owners with a reasonable level of
personal income and sufficient retained earnings to provide for sound fmancial
operations and growth; and
- reasonable business and personal éollateral available to secure the loan and be
commensurate with the amount and type of business fmancing required (the collateral
should provide for a secondary source of repayment for the loan).
Restrictions
. Same as for SBA guidelines.
. Not available when conventional bank financing can be secured.
. Funds cannot be used for:
- payment to owners, partners or stockholders;
- financing the change in ownership (exceptions per SBA guidelines);
- speculation in any kind of property;
- ~onprofit organizations;
- mvestments;
- loans to restricted membership groups or organizations; and
- businesses open less than twelve months.
Other Program Information
Borrowers will be required to use the small business education and counseling services provided
by the County's two Small Business Development Centers. Borrowers will also be required to
purchase the ProfitiinkTM program and contract with a qualified technical assistance provider until
loan maturity or for a time period determined by the BSBCDC and borrower at inception of the
loan committee.
A-4'- Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page D-8
Banker's Small Business CDC of San Diego
Stand By Letters of Credit (SLOC) Program
Program Overview
The Banker's Small Business Community Development Corporation (BSBCDC) was established
to provide fmancing in the fonn of micro loans and equity gap guarantees to meet the needs of the
small businesses in San Diego County.
The micro loan program provides flexible "gap fmancing" which on a project-by-project basis will
fIll the gap betWeen the amount of financing available from conventional sources and the amount
available from the SBA and other government sources.
Equity gap guarantees are provided in the form of stand by letters of credit to fulfill equity
requirements of SBA or State of California guarantee loan programs.
Program Type. Credit Gap Financing - Stand by Letters of Credit
Applicants Characteristics. For Profit Business - In business 1 or more years. Preference
will be given to minority and women owned businesses, and to
businesses located in Enterprise Zones and low and moderate
income and minority areas. (Applicants must meet eligibility
requirements outlined below)
Loan Type - Stand by Letters of Credit
Maturity - Maximum 3 years
Interest Rate - If SLOC is drawn, interest (0 be prime plus 3.5%
Matching/Equity Requirements - Up to 50% of Required Equity
Fees - 2% per year (collected up front); $250 Application Fee (payable in advance - non-
refundable); borrower to pay all out-of-pocket costs. Cost and fees may be financed in the
"associated" SBA loan.
The Loan Committee may, at its discretion, require a borrower to pay an additional
payment of interest/fee based upon the risk of the credit and the potential success of the
business. This additional interest/fee has a maximum 10% cap of the original loan amount
during the life of the loan, and is payable annually based on a percentage of increase in the
borrower's gross revenues. The sales level and fmancial statement/information "basis" for the
additional interest/fee is determined at the inception of the loan committee.
Prepayment Penalty - None
Collateral Requirements - Same collateral as underlying SBA loans; however, BSBCDC will
subordinate its security interest in the collateral to the SBA loan.
Guarantors to be the same as required by the SBA financing.
Lending Limits
Minimum - $5,000
/I - 4.3 Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page D-9
Maximum - $25,000
Eligible Uses
Real Estate No
Machinerv & Equipment Yes (see eligibility requirements and resttictions)
Inventory Yes (see eligibility requirements and resttictions)
Working Capital Yes (see eligibility requirements and resttictions)
~ None
Eligibility Requirements
. Business must be located in San Diego County.
. Business must be open and operating for a minimum of twelve months with positive profit
and cash flow trends covering the most recent six-month period
. BolTOwer must meet basic SBA credit guidelines.
. BOlTOwer must have:
- good character,
- show the ability and experience (or comparable) to operate a business of the type, size
and scope successfully and profitably;
- sufficient invested capital (not loaned--unless subordinated) so that 'with a TLB
program loan the business can operate on a sound basis;
- historical earnings and cash flow record together with future projected financial trends
that are sufficient to repay loan and to provide owners with a reasonable level of
personal income and sufficient retained earnings to provide for sound financial
operations and growth; and
- reasonable business and personal collateral available to secure the loan and be
commensurate with the amount and type of business fmancing required (the collateral
should provide for a secondary source of repayment for the loan).
Restrictions
. Same as for SBA guidelines.
. Not available when conventional bank: financing can be secured
. Funds cannot be used for:
- payment to owners, partners or stockholders;
- financing the change in ownership (exceptions per SBA guidelines);
- speculation in any kind of propeny;
- !1°nprofit organizations;
- mvestrnents;
- loans to restticted membership groups or organizations; or
- businesses open less than twelve months.
Other Program Information
BolTOwers will be required to use the small business education and counseling services provided
by the County's two Small Business Development Centers. BoITowers will also be required to
A-cfV Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page D-lO
purchase the ProfitlinkTM program and contract with a qualified technical assistance provider until
loan maturity or for a time period detennined by the BSBCDC and borrower at inception of loan
committee.
fi - 4:)' Cloggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis PageD-II
California Export Finance Office
Program Overview
The California Export Finance Office (CEFO) was established to help California's small- and
medium-sized exporters finance their export sales by providing working capital loan guarantees to
financial institutions to support specific export transactions. CEFO has three loan guarantee
programs:
. CEFO Pre-Shipment Workin~ Capital Guarantee - guarantees a working capital loan used
to purchase materials, services and labor for a specific export order.
. CEFO Post-ShiDment Accounts Receivable Guarantee - allows exporters to extend open
account terms to foreign buyers for the purchase of California goods and services, usually
extended in conjunction with Eximbank or private credit insurance. CEFO's guarantee
covers post-shipment risks pertaining to exporter performance not normally covered by
Eximbank or private insurers.
. CEFO Combination Guarantee - applies when pre-slùpment financing is required, but the
nature of the transaction includes post-shipment exposure.
Program Type - Guarantee Program
Applicants Characteristics - For profit, California businesses involved in export trade.
Loan Type - Guarantees of short-term (up to 18 months) transaction specific working capital
loans; single or multiple transactions (revolving line of credit); and cash loans/or
the issuance of standby letters of credit.
Maturity - Up to 18 months
Pre-Slùpment Workin& Capital Guarantee - 360 days
Post Shipment Accounts Receivable Guarantee - 180 days
Interest Rate - Established by Lender
Matching/Equity Requirements - Up to 90% Guarantee
Fees - $100 non-refundable application fee; one-half of one percent (facility fee), plus one-
quarter of one percent (usage fee) per 90 day period or fraction thereof.
Prepayment Penalty - None
Collateral Requirements - Accounts Receivable (requirements vary); Inventory (requirements
vary)
Lending Limits
Minimum - None
Maximwn - Maximum guarantee amount of $750,000 per export transaction; maximum
loan amount $833,000. When working capital requirements exceed
$588,000, the SBA may co-guarantee with CEFO to allow for a loan of up to
$1,176,000.
A-f(, Claggett Wolfe Associates
HOD Section 108: Phase I Feasibility Analysis Page D-12
Eligible Uses
Real Estate Yes - manufacturing of products/services only
Machinerv & Eauioment Yes (see eligibility requirements and restrictions)
Inventory Yes (see eligibility requirements and restrictions)
Workinl! Caoital Yes (see eligibility requirements and restrictions)
~ Accounts Receivable
Eligibility Requirements
. Principal export activity must be conducted by a California business.
. CEFO must be satisfied that the transaction is credit worthy and that the exporter Can fulfill
the responsibilities leading to the export sale.
. Business must have a fmn export order (signed purchase order or other documentation)
with some form of credit insurance or letter of credit.
. Funds can be used to finance the purchase of materials, services, and labor to cany out an
export sale.
Restrictions
. Principal export activity must be conducted by a California business.
. CEFO must be satisfied that the transaction is credit worthy and that the exporter can fulfill
the responsibilities leading to the export,sale.
. Business must have a fmn export order (signed purchase order or other documentation)
with some form of credit insurance or letter of credit.
Other Program Information
None
,A - 17 Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis PageD-I3
Small Business Administration
7(a) Loan Program
Program Overview
The Small Business Administration 7(a) loan program was established to provide guaranteed loans
to small businesses which are unable to obtain financing in the private credit marketplace, but Can
demonstrate an ability to repay loans granted. SBA provides guaranteed loans to low-income
business owners or businesses located in areas of high unemployment, nonprofit sheltered
workshops and other similar organizations which produce goods or services; to small businesses
being established, acquired or owned by handicapped individuals; and to enable small businesses
to manufacture, design, market, install, or service specific energy measures. In FY 1994, the SBA
expanded its 7(a) lending authority to include: 1) the Low Documentation Loan Program (Low
Doc); and 2) the Green Line Program.
The program is marketed by mc Small Business Finance Corp. and local participating lenders.
Program Type - Guarantee Program
Applicants Characteristics - Small businesses (including start-ups).
Loan Type - Term Loans
Maturity - Up to 25 Years
Interest Rate - Maximum prime plus 2.25% with maturity of 1 to 6 years; Maximum prime
plus 2.75% with maturity of? to 25 years. Rates established by lender.
Matching/Equity Requirements - Up to 75% Guarantee
Fees - 2 to 3.75 points to SBA as guarantee fee.
Prepayment Penalty - None
Collateral Requirements - Requirements will vary, but can be one or more of the following:
a lien on equipment, chattels, and/or inventory; assignment of
receivables; personal guarantees of corporate officers, directors,
stockholders or partners; or a mongage on personal and/or
business real estate.
Lending Limits
Minimum - Varies by Lender
Maximum - Maximum guarantee amount of $750,000.
Eligible Uses
Real Estate Yes (see eligibility requirements and restrictions)
Machinerv & Equipment Yes (see eligibility requirements and restrictions)
/I-4V Cloggett Wolfe Associates
BUD Section 108: Phase I Feasibility Analysis PageD-14
Inventory Yes (see eligibility requirements and restrictions)
Working C&pital Yes (see eligibility requirements and restrictions)
Other Business Acquisitions, Debt Consolidation
Eligibility Requirements
. BOITOwer must be a small business which is independently owned and operated and not
dominant in its field. Generally, SBA size standards for manufacturers range from 500 to
1,500 employees, depending on the industry; for wholesalers up to 500 employees,
depending on the industry; retailers and service concerns having revenues of $3,500,000
and in certain cases up to $17,500,000, may be considered small; and depending upon the
type of industry, agricultural enterprises have size standards from $500,000 to $3,500,000
in annual receipts.
. Borrower must show an ability to repay the loan as well as strong potential for success.
. Borrower must be unable to obtain conventional financing.
Restrictions
. Excludes gambling establishments, non-profit enterprises, speculators in property, lending
or investment.
. Excludes funds to indiscriminately relocate the business.
. Funds must not otherwise be available on reasonable tenTIs.
. Funds must not be used to payoff a loan to an unsecured creditor who is in a position to
sustain a loss.
Other Program Information
None
~-49 Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis PageD-15
CDC Small Business Finance
SmalI Business Administration
504 Debenture Loan Program
Program Overview
The Small Business Administration 504 debenture loan program was established to assist small
business concerns by providing long-tenn fixed rate financing for fixed assets through the sale of
debentures to private investors. The program allows small business owners to purchase, construct
or remodel an industrial or commercial building, or purchase machinery and equipment while
preserving working capital.
A 504 loan is a mixture of private capital, and CDC debenture funds which are guaranteed 100%
by the federal government.
Program Type - Guarantee Program
Applicants Characteristics - Small businesses (in business one or more years).
Loan Type - Term Loans
Maturity - 10 and 20 Years
Interest Rate - 40% of the project at a fIXed rate at time of debenture sale. Rates for 50% of the
project established by lender.
Matching/Equity Requirements - 10% down payment or equity injection required.
Fees - 27/8 points on 40% guaranteed by SBA, points vary 50% financed by lender.
Prepayment Penalty - Yes (decreasing, but assumable--may subordinate to other financing)
Collateral Requirements - Requirements will vary, but can be one or more of the following: a
lien on equipment; personal guarantees of corporate officers,
directors, stockholders or partners; and a mortgage on business real
estate.
Lending Limits
Minimum - Minimum amount of $100,000
Maximum - CDC fmances 40% or up to $750,000 of the project.
Eligible Uses
Real Estate Yes - Total project costs may include related "sòft costs".
(see eligibility requirements and resnictions)
Machinerv & EouiDment Yes (see eligibility requirements and n:snictions)
Inventory No
A-STJ Claggett Wolfe Associates
HUD Section 108: Phase 1 Feasibility Analysis PageD-16
Workinl! CaDital No
Q!hg No
Eligibility Requirements
. Borrower must be a small business which is independently owned and operated and not
dominant in its field. Generally, SBA size standards for manufacturers range from 500 to
1,500 employees, depending on the industry; for wholesalers up to 500 employees,
depending on the industry; retailers and service concerns having revenues of $3,500,000
and in certain cases up to $17,500,000, may be considered small; and depending upon the
type of industry, agricultural enterprises have size standards from $500,000 to $3,500,000
in annual receipts.
. Borrower must show an ability to repay the loan as well as strong potential for success.
. Borrower must be unable to obtain conventional financing.
. Borrower must have a minimum history of one year.
Restrictions
. Ex~ludes gambling establishments, non-profit enterprises, speculators in property, lending
or Investment.
. Excludes funds to indiscriminately relocate the business.
. Business net worth must not exceed $6 million.
. Business must have an average net profit for two consecutive years that is less than $2
million after taxes.
. Program funds cannot be combined with proceeds from Industrial Revenue Bonds.
Other Program Information
None
A-SI Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page D-17
California Southern Small Business Development Corporation
California's Regional Guarantee Program
Program Overview
The California Regional Guarantee Program has been established to provide loan guarantees to
businesses which have a significant job impact in the state. The program is administered in the San
Diego area by California Southern Small Business Development Corporation.
Program Type - Guarantee Program
Applicants Characteristics - Small businesses (including start-ups) as defined by SBA
guidelines.
Loan Type - Loan guarantees for lines of credit, micro loans and tenD loans.
Maturity - Lines of credit generally to I year; tenD loans to 7 years.
Interest Rate. Rates established by lender.
Matching/Equity Requirements - None
Fees - 2% of guaranteed portion plus $250 documentation fee.
Prepayment Penalty - No
Collateral Requirements - Requirements will vary, but can be one or more of the following:
a lien on equipment, chattels, and/or inventory; assignment of
receivables; personal guarantees of corporate officers, directors,
stockholders or partners; or a mortgage on personal and/or
business real estate.
Lending Limits
Minimum - Varies by participating lender. ($10,000 is smallest loan booked to date)
Maximum - Maximum guarantee $350,000, up to 90% of loan amount (average guarantee
is closer to 75% to 80%)
Eligible Uses
Real Estate Yes - Usually limited to leasehold improvement due to tenD.
(see eligibility requirements and restrictions)
Machinery & Equipment Yes (see eligibility requirements and restrictions)
Inventory Yes (see eligibility requirements and restrictions)
Workinl! Capital Yes (see eligibility requirements and restrictions)
Other Accounts Receivable, Business Acquisition
A-.5'~ Cloggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page D-18
Eligibility Requirements
. Borrower must be a small business which is independently owned and operated and not
dominant in its field. Generally, SBA size standards for manufacturers range from 500 to
1,500 employees, depending on the industry; for wholesalers up to 500 employees,
depending on the industry; retailers and service concerns having revenues of $3,500,000
and in certain cases up to $17,500,000, may be considered small; and depending upon the
type of industry, agricultural enterprises have size standards from $500,000 to $3,500,000
in annual receipts.
. Borrower must show an ability to repay the loan as well as strong potential for success.
Restrictions
. Excludes gambling establishments, non-profit enterprises, speculators in propeny, lending
or investment.
. No loans for investment purposes.
. No loans for repayment of shareholder loans or taxes, or buyout of an ownership position.
. No refinancing of past due obligations or refinancing of existing debt, but can move debt
from lender A to lender B under specific circumstances (e.g., continued expansion needs
exceed current lenders lending limits, etc.). In these cases, maximum guarantee is 70%.
Other Program Information
None
A - ~-g Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis PageD-19
California Economic Development Lending Initiative (CEDLI)
Co-Lending Program for Small Business
Program Overview
CEDLI is a multi-bank community development corporation established in July, 1995 to make
loans to small businesses and community economic development organizations throughout
California. CEDLI is a for profit corporation and its mission is to create jobs by providing
fmancing to small businesses and community economic development activities which fall outside
of nonnal bank lending practices. Its founding investors and member banks include 34 financial
institutions and four corporations which are investors in CEDLI and participants in a $50 million
fund to provide financing to its target market.
CEDLrs small business loan program, called the Co-Lending Program, targets loans to emerging
businesses in both urban and rural areas that are currently not able to qualify for conventional bank
financing. Women and minority owned businesses are a high priority for financing. CEDLI
works in partnership with its member banks in the Co-Lending Program by funding up to 50% of
the loan requirement of a business while a member bank funds the other 50% of the loan. All
loans in the Co-Lending Program must be initially approved by a CEDLI member bank which may
work in partnership with a CEDLI corporate investor or community organizations to originate
small business loans.
Program Type - Direct Lending Program
Applicants Characteristics - For both profit and nonprofit small businesses (up to
approximately $10 million in sales) in both urban and rural
areas that have been in business at least 12 months and are
located in California, priority will be placed on making the
program accessible to minority and women owned businesses,
businesses that are located in under served areas, and business
owners from low income communities.
Loan Type - Tenn loans and Lines of Credit structured as subordinated debt.
Maturity - Lines of credit to I year (renewable annually); tenn loans to 7 years.
Interest Rate - Price in accordance with risk, approximately prime plus 2-5% p.a.
Matching/Equity Requirements - Minimum 50% with remainder fmanced by CEDLI
member bank. Borrower's ponion not specified.
Fees - 1% to 2%
Prepayment Penalty - Not Specified
Collateral Requirements - Requirements will vary, but can be one or more of the following:
a lien on equipment, chattels, and/or inventory; assignment of
receivables; personal guarantees of corporate officers, directors,
stockholders or partners; or a mortgage on personal and/or
business real estate. . .
/1- ~-rf Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page D-20
Lending Limits
Minimum - $50,000
Maximum - $250,000
Eligible Uses
Real Estate Yes - Limited to leasehold improvements. (see eligibility
requirements and restrictions)
Machinery & Eauioment Yes (see eligibility requirements and restrictions)
Inventory Yes (see eligibility requirements and restrictions)
Workiny: Capital Yes (see eligibility requirements and restrictions)
Other Accounts Receivable, Business Acquisition
Eligibility Requirements
. Borrower must be a for profit or nonprofit small business (up to approximately $10 million
in sales) that has been in business at least 12 months and is located in California. Priority
will be placed on making loans to the following types of borrowers; minority and women
owned businesses, businesses that are located in under served areas, and business owners
from low income communities.
. Business should be profitable with continuing positive trends, and have tangible net wonh.
Restrictions
. Loan funds must be used for business purposes that are consistent with CEDLI's mission,
preferably used for business expansion, job creation, etc.
. Loans cannot be used for speculative purposes.
. Loans must be originated through a CEDLI member bank which may work in partnership
with a CEDLI corporate investor or with a qualified technical assistance provider.
Other Program Information
None
A - ~~- Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page D-21
Border Environmental Commerce Alliance (BECA)
Micro Loan Program
Program Overview
The program is designed to benefit start-up businesses who are tenants of the Border
Environmental Business Cluster by providing needed capital for growth. The program targets
gaps in existing program offerings by focusing on contract financing and AIR financing using a
loan guarantee in conjunction with the existing programs of the Banker's Small Business
Community Development COIporation (CDC) and ACCION International. The combined
guarantee and direct lending programs will increase lending limits through the program to $70,000.
Program Type - Loan Guarantee Program
Applicants Characteristics - Tenant businesses of the BEBC.
Loan Type - Tenn loans.
Maturity - Maximum 2 Years.
Interest Rate - Variable or fixed rate financing based on project.
Matching/Equity Requirements - None
Fees - 2.5% Guarantee Fee
Prepayment Penalty - None
Collateral Requirements - Pledge of AJR' or contract proceeds and other collateral as required
to secure individual loans.
Lending Limits
Minimum - None Specified
Maximum - $25,000
Eligible Uses
AJR Financing Yes
Contràct Financing Yes
Machinery & Equipment Yes
Inventory Yes
Workin!! Caoital Yes
Other None
/I-.s~ Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page D-22
Eligibility Requirements
. BoITOwer must be a for profit micro enterprise that has been in business at least 6 months
and is located in the BEBC.
. Business should have the ability and integrity to pay back a loan.
Restrictions
. BoITOwer must be a for profit micro enterprise that has been in business at least 6 months
and is located in the BEBC.
Other Program Information
Borrower must commit to a technical assistance contract that can be funded out of loan proceeds.
The fee is based as follows: $75/Month for each of the flI'St three months; $75 per quarter for each
subsequent quarter, and $125 following loan close-out and submission of the final report to the
lender (Maximum of $875).
¡4-S1 Claggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page D-23
ACCION San Diego
Micro Loan Program
Program Overview
The primary mission of ACCION San Diego is to stimulate local economic groWth by facilitating
access to credit and business support to micro entrepreneurs which traditionally have no access to
commercial credit. ACCION San Diego positions itself as an intennediary lender between
commercial banks and microbusiness operators, specifically targeting disenfranchised, low
income, and minority microentrepreneurs.
ACCION San Diego provides very small, "micro" business loans. ACCION loans begin
anywhere between $750 to $5,000. Once the initial or current loan is repaid, the business may
apply for a larger loan up to $25,000. This process of "stepping" allows the business owner to
methodically gauge the success of their capital investment as well as enables them to establish a
credit history through their relationship with ACCION. It also enables ACCION to provide
technical assistance directly or through refeITals as the business grows and encounters different
needs and obstacles. Once the business has reached its maximum lending limit with ACCION it
will have developed sufficient capacity to access credit through the traditional banks and other
mainstream lending institutions.
ACCION offers clients a group loan option. A group consists of 4 to 8 members. Group
members guarantee each other's loans, eliminating the need for a co-signer or collateral. Loans are
disbursed at $750 per group member. Once a group member pays off the loan, he/she has access
to a larger loan provided that everyone in the group is current on their existing loan.
ACCION also offers an individual loan program. Borrowers need a co-signer and collateral to
secure the loan. Loan amounts depend on the QoITowers need and financial capacity to make
monthly payments. Individual loans use the "stepping" process described above. First individual
loans will not exceed $5,000, and second loans will not exceed $75,000. Subsequent loan
amounts are detennined on a case by case basis not to exceed $25,000.
Program Type - Direct Lending Program
Applicants Characteristics - For profit microenterprises owned and operated by
disenfranchised, low income, and minority micorentrepreneurs.
Loan Type - Tenn loans.
Maturity - Not Specified.
Interest Rate - Variable fixed rate financing based on project.
Matching/Equity Requirements - None
Fees - Not Specified
Prepayment Penalty - None
Collateral Requirements - None for Group Loans. Co-signer and Collàteral required to
secure individual loans.
/I-~~ C[(Jggett Wolfe Associates
HUD Section 108: Phase I Feasibility Analysis Page D-24
Lending Limits (see program overview above)
Minimum - $750
Maximum - $25,000
Eligible Uses
Real Estate Size limits use for real estate.
Machinery & Eauiument Yes
Inventory Yes
Workinl! Capital Yes
Qthg None
Eligibility Requirements
. Borrower must be a for profit microenterprise that has been in business at least 12 months
and is located in San Diego County.
. Business should have the ability and integrity to pay back a loan.
Restrictions
. Borrower must be a for profit microenterprise that has been in business at least 12 months
and is located in San Diego County.
Other Program Information
None
A-~ Claggett Wolfe AssocioJes
ATTACHMENT B - Page I
Hun SECTION 108 LOAN PROGRAM
A. HOW COMMONLY IS THE lOB PROGRAM USED FOR ECONOMIC DEVELOPMENT ACTIVITIES?
The HUD Section 108 program allows cities and counties to "borrow against" their future annual
Community Development Block Grant (CDBG) entitlement allocations to implement CDBG-eligible activities.
The Section 108 Program was established in 1974 with an emphasis on traditional CDBG activities, such
as housing rehabilitation. Section 108 regulations were revised in 1987 to include economic
development as an eligible activity, offering cities a new vehicle for assisting businesses who are having
difficulty obtaining private financing by providing direct business loans andfor guaranteeing private loans.
The program was revised again in 1990 to increase the maximum amount that a City can "borrow" to
up to five times its annual entitlement and to extend the maximum loan repayment period to 20 years.
Section 108 has greatly expanded its economic development emphasis and is now being utilized as a
business development tool by many cities across the country.
B. HOW DOES SECTION lOB WORK?
Chula Vista can apply for authorization to "borrow" up to $10.35 million (5X our annual allocation) under
the Section 108 program in order to provide loan guarantees and/or direct loans.
1. Loan Guarantees
Under a loan guarantee program, the City provides the credit enhancement needed to make a private
loan feasible. Specifically, the City reduces the risk to the lender by pledging CDBG monies as additional
collateral. An example of a project-specific loan is Worchester, Mass. The City of Worchester provided
an $11.7 million Section 108 loan guarantee to be used as credit enhancement to secure $14.1 million
in AFL-CIO financing for a 93,000 sq. ft. biotech facility locating in the Massachusetts Biotechnology
Research Park. (The City of San Diego and the County are currently evaluating the use of a Section
108 loan and/or loan guarantee for a San Diego biotech manufacturing firm considering relocating out
of state.) In the event of the borrower's default, notes would initially be sold by HUD to correct the
default with the private lender. The City and HUD would then negotiate a repayment schedule to retire
the debt using future CDBG allocations or a previously established Reserve Fund.
2. Direct Loans
Under a Direct loan program, the City is the direct lender, which allows the City to define all terms and
underwriting criteria. Direct loans may be made under a standardized "Revolving Loan Program" (RLP)
with pre-established, uniform lending criteria, !![ negotiated on a project by project basis. Under
an RLP Program with pre.determined, standard underwriting criteria, the City can make loans which
comply with these criteria without further HUD review. An example of a loan under an RLP Program,
would be $30,000 for $100,000 in equipment. with the loan structured to meet pre-set criteria (e.g.
loan term, collateral requirements, loan-to-value ration, debt.to.cash flow, minimum and maximum loan
amount, etc.). and the balance coming from a private bank and equity participation.
ß-I
ATTACHMENT B. Page 2
HUD SECTION 108 LOAN PROGRAM
Negotiated loans which are uniquely structured, generally as part of a comprehensive incentive package
for a larger development project, and which do not comply with pre-established criteria, require individual
HUD approval. (These loans would also be submitted to Council for approval prior to submission to
HUD.) An example of a negotiated loan would be City of San Diego provided a $7.2 million Section 108
loan to San Diego Mercado Associates combined with a $750,000 ED! grant, a $1 million EDA grant,
tax increment and private funds to develop a mixed-use project in Barrio logan.
Under this Direct loan scenario, HUD would sell notes to investors in order to capitalize the City loans.
These notes would use our CDBG entitlement as collateral. If the City were to establish a "Revolving
loan Program," the City could draw down the entire amount requested to fund the Program or could
request HUD to sell notes as individual loan applications are approved. Federal note proceeds are loaned
by the City to the local business, which would be required to pay debt service as well as issuance fees
and interest. Interest rates are favorable due to the CDBG collateral (currently, floating rates are below
6%; fixed rates are about 6.5%). No cash outlay is required by the City. No General Fund monies
are expended. The only liability to the City is in the event of a default which cannot be
worked out with the borrower. At that point, the City would negotiate with HUD to set up a
repayment schedule (up to 20 years) using future CDBG allocations or a previously established
Reserve Fund.
C. ARE THERE OTHER SUCCESSFUL MODElS FOR THIS PROGRAM?
To date, HUD has approved over 600 Section 108 loan applications for funding Revolving loan
Programs, incubator development, and real estate development projects. Successful programs range from
the negotiated $11.7 million biotech loan guarantee in Worchester, Massachusetts to the City of
Hayward's $1 million RlP which offers loans ranging from $5,000 to $100,000. In California alone,
approximately 85 cities have a Revolving loan Program; of these approximately 45 are funded by CDBG
or Section 108, with other sources including EDA grants, Industrial Development Bond fee revenue,
Business Improvement District funds, General fund, and private capital. Staff has researched numerous
Section 108 and CDBG funded loan programs to identify both the key elements of success and the
potential pitfalls. The proposed Chula Vista RlP is envisioned to be modeled loosely after the Hayward
program. See Attachment C for a summary of Hayward and other sample programs.
D. WHAT ARE THE SECTION 108 ELIGIBILITY CRITERIA FOR BUSINESS LOANS?
1. Elioible Activities:
Section 108 funds may be used for: equipment, land and buildings; construction and rehabilitation; site
improvements, clearance, demolition, and relocation; working capital; and micro enterprise development.
ß-d-..
A TT ACHMENT B - Page 3
HUD SECTION 108 LOAN PROGRAM
2. CDBG National Dbiectives
The use of the funds must satisfy one of the two main CDBG national objectives, namely: 1) majority
benefit to low and moderate income persons; or 2) elimination or prevention of slums and blight.
Economic development activities that create or retain iobs, a majority of which could qualify under the
low and moderate income benefit criteria, have been emphasized in the past. This criteria can be met
by documenting that jobs created or retained are "made available to low and moderate income workers."
3. "Necessarv and aoorooriate" test
HUD requires staff to make a finding that the use of funds for a for.profit entity is needed because
private debt financing is unavailable or too costly, or private equity investment will not occur because
the return is insufficient. Job creation and the overall favorable impact on the local economy is also
taken into account.
E. WHAT IS THE RISK TO THE CITY?
1. Borrower defaults
Public sector economic development financing is utilized to assist businesses which are otherwise unable
to obtain adequate private financing. Therefore, such public assistance inherently entails an element of
risk. Under Section 108, the City must pledge security for each loan made, including future CDBG
entitlements and Section 108 program income (interest. fees). If a community uses sound underwriting
standards and requires loans to be paid within the life of the asset financed, no additional City security
would be required. However, the borrower may be required to place a lien on the asset financed
(mortgage, deed of trust. UCC filing) and to provide some form of personal guarantee. If the City
wishes to finance a "riskier" project. with negotiated, non-standard underwriting criteria, HUD will most
likely require the City to pledge additional security, such as tax increment or other identified sources
of income.
As noted, in the event of a default. HUD would assume payments on the loan. The City would
reimburse HUD, ideally from a Program loss Reserve Fund which could be created using City loan
origination fees and/or interest rate premiums, future CDBG allocations, redevelopment funds, or other
sources. Specific terms of repayment would be negotiated with HUD.
2. Risk Mitiaation: Citv Policies and Procedures
Clearly, the City should minimize its risk. Risk mitigation measures that will be evaluated in Phases II
and III include, but are not limited to:
8 Shared public/private risk exposure: Emphasizing and/or limiting loans to "gap"
financing structured to leverage as much private investment as possible.
13-3
ATTACHMENT B. Page 4
HUD SECTION 108 LOAN PROGRAM
8 Full Security: Requiring trust deeds, collateral, personal guarantees, etc. in order to offset
the City's risk.
8 Term Limitation: Setting a maximum number of years for pay back between 7-10 years
to limit necessary security.
8 Portfolio diversification: Establishing a maximum loan amount, such as 10% of the total
Program pool.
8 Loan Loss Reserve Fund: Establishing a fund to "buffer" potential defaults, financed by
City loan origination fees and/or interest rate premiums, or other sources.
8 Phased Implementation: Phased implementation to ensure adequate time for loan loss
reserves to build lif reserve fund not adequately "seeded" initially).
8 Loan Approval Process: It is highly recommended by the consultant and experienced loan
managers that the City establish a loan approval process that operates outside the influence
of local politics, e.g. creating a staff appointed loan review committee comprised of highly
qualified lenders and community representatives.
3. Risk Mitioation: HUD Economic Develooment Initiative !EDII Grant
The Economic Development Initiative (ED ) is a HUD grant program designed to mitigate the risk to
a municipality of "borrowing" Section 108 funds for economic development purposes. EDI funds
are available on a highly competitive basis and can be used to: 1) fund a loan loss reserve fund
for a direct loan program, project specific or loan guarantee program; 2) provide a grant to the
individual business receiving a 108 loan or loan guarantee to strengthen the project's economic
feasibility; or 3) enhance the collateral of a "project specific" direct loan or loan guarantee. Staff
is recommending that the City prepare an ED! grant application to be submitted concurrently with
the Section 108 application (see E.2. above).
F. How does the City apply for Section 108 Authorization and for an EDI Grant?
1. Section 108 Loan Aoolication:
The Section 108 application is a four step process: 1) preparing the application; 2) holding two
public hearings; 3) submitting application to HUD Area Office; and 4) HUD Central office
(Washington, D.C.) review and approval. The City can submit either a Generic or a "Project
Specific" application. Approval by HUD of a Generic application reserves the total requested
Section 108 allocation for a Revolving Loan Program (RLP) which allows the City to make direct
loans based uoon Council.aooroved ore-determined credit criteria. (For example, $1 million could be
"reserved" for a Chula Vista RLP. The City could make loans which comply with standard, preset
criteria, up to the $1 million amount)
ß- t/
ATTACHMENT B - Page 5
HUD SECTION 108 LOAN PROGRAM
A "Project Specific" application must be submitted separately to HUD for a neootiated loan -
typically for a larger real estate development project. that deviates from the RlP's pre-determined
loan criteria, and which may expose the City to greater risk. Using the scenario under which the
City obtained a $1 million authorization for a Generic RlP, this would leave a $9.35 million balance
(the City's maximum authorization of $10.35 million - $1 million) that could be applied for to fund
individual, negotiated loans.
In terms of Council approval, a negotiated "Project Specific" loan which deviates from the
standardized criteria would be submitted to Council for approval prior to submittal to HUD.
Individual RlP loans which comply with pre-determined, credit criteria would not require individual
Councilor HUD approval. AI! loans and loan guarantees would require review and approval by the
City's loan Review Committee.
2. ED! Grant Aoolication:
If the City elects to submit an EDI grant application, it must be submitted concurrently with the
Section 108 application. While ED! funds were available in FY 1993/94, 1994/95 and 1995/96, the
program was not funded in Fiscal Year 1996/97. However, HUD has requested an EDI allocation
of $50 million for Fiscal Year 1997/98. If the ED! appropriation is made, the notice of funding
availability and application guidelines are expected to be issued as early as mid. October 1997, with
applications due mid to late November (a 4-6 week window). The funds will be awarded on a
competitive basis. The maximum award is 15% of the 108 Authorization (e.g. $150,000 for a $1
million authorization).
l3-tJ-
ATTACHMENT C
TIMELINE AS PROPOSED
AUG. SEPT. OCT. NOV. DEC. JAN.
PHASE II Generic 108 Application X I X I X
Preparation
Public Hearings X
Submission
PHASE III Program Development
Public Meetings X
PHASE IV ED! Notice of Funding
Availability (NOFM
Application Preparation X
NOFA Deadline/Submission X
1 If EDI is funded, it is anticipated that the EDI applications will be available sometime after October 1,
1997, with the deadline sometime in November allowing only 4.6 weeks for application preparation and
submission to HUD.
ICOIOA! H:\HOME\COMMOEVISTAFF.REP\OS.()5.97\HUOlOB (July 30. 1997 16,53pml]
C - I
A TT ACHMENT 0 - Page 1
SAMPLE 108/COBG.FUNOEO LOAN PROGRAMS
CITY/PROGRAM: Hayward/Small Business Revolving Loan Fund
FUNDING SOURCE: COBB
FUNDING AMOUNT: $1.02 million
ELIGIBLE ACTIVITIES: Acquisition of land and equipment. construction, renovation, working capital
for expansion and start-up
LOAN SIZE: $5,000 to $100,000
PROGRAM START: 1993
NUMBER OF LOANS: 15
NUMBER OF DEFAULTS: 1 ($15,000)
NUMBER OF EMPLOYEES: 1 loan officer
1 part-time COBB compliance officer
CITY/PROGRAM: Sierra Economic Development District/Revolving Loan Fund
FUNDING SOURCE: COBB
FUNDING AMOUNT: $1.5 million
ELIGIBLE ACTIVITIES: Acquisition of land and equipment. construction, renovation, working capital
for expansion and start-up
LOAN SIZE: $5,000 to $100.000
PROGRAM START: 1994
NUMBER OF LOANS: 25
NUMBER OF DEFAULTS: 1 ($20,000)
NUMBER OF EMPLOYEES: 1 loan officer
1 part-time COBB compliance officer
CITY/PROGRAM: Hamilton, Ohio/Revolving Loan Fund
FUNDING SOURCE: COBB
FUNDING AMOUNT: $700.000
ELIGIBLE ACTIVITIES: Acquisition of land and equipment. construction, renovation, working capital
for expansion and start-up
LOAN SIZE: $15.000-$100.000 (average $71.000)
PROGRAM START: 1995
NUMBER OF LOANS: 5
NUMBER OF DEFAULTS: 0
NUMBER OF EMPLOYEES: 1 loan officer
.1)-(
ATTACHMENT D. Page 2
SAMPLE 108/CDBG.FUNDED LOAN PROGRAMS
CITY/PROGRAM: La Puente
FUNDING SOURCE: HUD Section 108
FUNDING AMOUNT: $1.8 million
ELIGIBLE ACTIVITIES: Acquisition of land and equipment. construction, renovation, working capital
for expansion and start-up
LOAN SIZE:
PROGRAM START: 1995
NUMBER OF LOANS: 0
NUMBER OF DEFAULTS: 0
NUMBER OF EMPLOYEES: 1 loan officer
ADDITIONAL INFORMATION: The program has not been utilized from staff's perspective largely for two
reasons:
1) City Council made a requirement for 1 new job for each $25,000 in
loan. Staff is finding that it is too difficult for businesses to
commit to hiring new staff when they are experiencing difficulty
keeping their current staff.
2) Many of the businesses in the community are owned by older
people who own the property free and clear and they are hesitant
to incur new debt. Staff says they have a lot of interest calls but
have issued no loans.
CITY/PROGRAM: oakland/HUo 108 Loan Program
FUNDING SOURCE: HUD Section 108
FUNDING AMOUNT: $3 million
ELIGIBLE ACTIVITIES: Acquisition of land and equipment. construction, renovation, working capital
for expansion and start-up
LOAN SIZE: $100,000 to $2,000,000 (average of $500,000)
PROGRAM START: 1981
NUMBER OF LOANS: 20
NUMBER OF DEFAULTS: 4 ($500,000; $490,000; $240,000; and $150,000)
NUMBER OF EMPLOYEES: 1 loan officer
1 part.time CDBG compliance officer
ADDITIONAL INFORMATION: The defaults involved high risk companies with loans with lenient loan
criteria. There is currently a moratorium on lending, while the loan criteria
is being revised. The new loan criteria will involve more conservative
guidelines.
~-d--
ATTACHMENT D. Page 3
SAMPLE 10B/CDBG.FUNDED LOAN PROGRAMS
CITY/PROGRAM: Philadelphia, Pennsylvania/Revolving loan Fund
FUNDING SOURCE: HUD Section 108
FUNDING AMOUNT: $20 million
ELIGIBLE ACTIVITIES: Acquisition of land and equipment, construction, renovation, working capital
for expansion and start-up
LOAN SIZE:
PROGRAM START: 1994
NUMBER OF LOANS:
NUMBER OF DEFAULTS:
NUMBER OF EMPLOYEES:
CITY/PROGRAM: Worchester, N assachusetts/Section 108 loan Program
FUNDING SOURCE: HUD Section 108
FUNDING AMOUNT: $23 million,
ELIGIBLE ACTIVITIES: Biotechnology ¡research, development manufacturing and other related CDBG
eligible activiti~s
LOAN SIZE: No standard, rþnge from $100,000 to $11.7 million
PROGRAM START: 1992 I
NUMBER OF lOANS: ¡
NUMBER OF DEFAULTS: I
NUMBER OF EMPLOYEES:
ICDIDAI H,\HDM~CDMMDEV\STAFF.REP\D8.D5.9~HUD1D8 IJ,ly 30, 1987 16,53'1'11
/J-.3
JUtHI-97 WED 03:IB PI1
ATTACHMENT D
.' ¡
CITY OF HAYWARD
SMALL BUSINES¡ a REVOLVING LOAN FUND
I
""""""'" OF TlIB $' ................ - '- ....
provides loans to qoa1ified businesses' Hayward. The pu:rpose or these loans is to eaab1e
businesses to create job opportunities, rticu1arly fùr low and moderate inooDle residents oC
Hayward. Special incentives wm be p for businesses that serve the tmget neighbomoods at
Harder-Tennyson and Burbank.
USE OF FUNDS: Loan f=iIs :f4 be u.sed for ~ improvements, equipment acquisit:ion,
leasehold improvements, working capi , and real estate.acquisitionirebabiIitatiou for owner-
occupants.
ELlGIB1LITY CII.l'I'I<RJk 'cl;:"""""- b. -- - --
(1) have been in operation fur at two years;
(2) are located. in 01' willing to te in Hayward;
(3) have a sound eredit history; I
(4) falI within the SBA definit:io;smaIl business;
(5) oft'er job opportunities for low and moderabl income residents of Hayward; and
(6) need additional :6nan(:ÍDg to the gap between the bwdness' oeeda cd owner's
equity or private financing. ,
Businesses must sign a Firat Source Hì~ ~t reqoiring 51 percent of an jobs created be
offered to low and moderate income Ha residents.
AwUcant business must have a ~+ retlbned eamings or owner equity of 10-20 percent of
the total project cost.
MAXIMt1H LOAN AMOUNT- f' -.- """'" .. .... " ..... -""'......
ing through loans andfor illfusions rñ 'ty. The City loan will be utilized to provide saf1icient
"gap' financing to mùe the project wo The1l1Uimum City share is $100,000, suQiect to the
availabmty of funds. In generaJ, busine loans range &om $10,000 to $50,000. Facade im.
provement loans have a maximum of $5 000 per $tormont. .
INTEREST BATE: The interes~ on business loans is fixed at the prime oomml!1vÎlÙ
!ending rate at the time ofloan c10si0g. There is a loan origination fee of one percent of the loan
amount. Facade improvement l<>ana at\ intere5t rate of 3 percent.
,
MATVRITY Tn gen..-al, husina$ will have a maximum term that matches the economie
life of the l$li9t beiDg financed. AUlo will be reviewed on an annual basis and s1Ù!Ìeet to call as
described in the lœn agreement. F , imPFOVeDl&D.t Ioims have a maximum term of'five years.
COLLATERAL; City loan:; mlUit 1 çproprlatcIy secured by real property, equipment, or
other business anellor penonal assets. ,ity loans can be subordinate to the private leÐder.
HOW THE PROGRAM OP~: Apply at the Department of Community and
Economic Development, City ofHa 25151 Claw:iter Road, H8yward, California 94545-2731.
'Loan applicaöons.must include a no dahle $35 application fee. For more Information.
eontact Paul Dalman at 293--5386. ,
CBD:m
IJ-cf
COUNC.u¡. AGENDA STATEMENT
Item~
Meeting Date 8/5/97
ITEM TITLE: Resolution 131ry granting easement to owner of the property at 4045
Palm Drive fOf rejote water service through City Open Space and approving
agreement with s id owner wvspect to said water service.
SUBMITTED BY: Director ofPubliq works,!!
Œ=M ofp"" "'" R"~
REVIEWED BY: Ci<y Mm""J4I ~ (4151'. V.." Y ~ - Noll)
I ..-..-
,
Mr. Paul Chavez, owner of the vacant property at 4045 Palm Drive plans to build a single family
home on the parcel. The most practical anØ economical way of receiving water service with sufficient
pressure is to have a remote service ins~alJed through City open space. In order to have a meter
installed, Sweetwater Authority requires thþ owner to provide evidence of a grant of easement by the
City for the pipeline from Greenwood Place, through two open space lots to the property. (See
Exhibit "A")
RECOMMENDATION: That Cou~cil adopt the subject resolution granting the subject
easement, approving the subject agreement as conditioned and authorize the Mayor to sign the grant
deed and agreement on behalf of the City¡ and direct the City Clerk to forward them to the County
Recorder.
BOARDS/COMMISSIONS RECOMMENDATION: No Board or Commission action is
needed in this matter.
DISCUSSION:
In order to build a home on his property a~ 4045 Palm Drive, which is in the unincorporated area of
the County, the owner, Mr. Paul Chave~, must instalJ fire sprinklers in the dwelJing. There is not
sufficient pressure in the existing water main in Palm Drive to operate a sprinkler system.
One of the previous owners of the propertYh Mr. Kirby Horrell, also planned to build on the property,
but never followed through. Upon contacti g Sweetwater Authority in 1989, Mr. HorrelJ was given
the following alternatives to obtain the requIred water pressure for fire protection (estimates provided
by Sweetwater Authority, except where Qoted):
)Ù- \
Page 2, Item
Meeting Date 8/5/97
Alt 1 Installation of a remote service (p~vate, two-inch diameter line) ITom Greenwood Place with
an easement through the City' s ~pen space lots. City staff has estimated this work to be
approximately $7,100. '
Alt2 Provide higher pressure main tom Greenwood Place. This alternative includes the
installation of 600 feet of 8-inch "rater main and 450 of 6-inch water main. Estimated cost:
$100,000.
Alt3 Similar in nature to Alt 2, using ~ different route for the main, this method would require
installation of 750 feet of 8-indh main and 450 feet of 6-inch main. Estimated cost:
$152,000.
Alt4 Install one hydro pneumatic pump ~tation, which would take service ITom the Wheeler Tank
and raise it to a higher pressure. {\dditional 8-inch and 6-inch mains are also required for a
fire hydrant and domestic service~. Estimated cost: $288,700.
These options are still open to the present <jwner. He has been advised by Sweetwater Authority that
the company is ready to install the meter fot the remote service upon the owner's ability to obtain an
easement. Sweetwater Authority will instaJiI a meter at the back ofthe public sidewalk on Greenwood
Place and the owner will provide the two-i9ch private line through the open space lots to his property.
The location of the easement is proposed t1 cross Open Space Lot 219 of Bonita Ridge Estates, Unit
No.4 and Open Space Lot 140 of Unit 3 see Exhibit "A:'). The alignment partially coincides with
a similar water service easement granted to fr. Walter Shaw by the Council in 1983. This easement
will extend from the point where Dr. Sh w's easement meets his parcel, then turn in a southerly
direction along the easterly boundary o~ Open Space Lot 140, approximately 750 feet to Mr.
Chavez's parcel.
The owner has had a biological firm inveslgate the site. The conclusion that the proposed work, if
done by hand, would have no impact on the endangered gnatcatcher or its habitat. This condition will
be included in the agreement. ,
dO - d-
Page 3, Item
Meeting Date 8/5/97
i
Staff recommends that Council approve tþe grant of easement subject to the applicant entering into
a conditioned agreement with the City (~ee Exhibit "ß"). To summarize the conditions:
1. The owner agrees that any grar\! of easement for water service to his property may be
revoked in the event that Ownet or his successors in interest object to annexation of the
property to Chula Vista. (NOTE: 1 We will not require annexation of Mr. Chavez's property
until such time as a block of ten 'I'r more parcel owners have agreed to annex.)
2. The owner is responsible for allicosts of water line constructed and operated to serve the
property. i
I
3. The owner agrees to submit a CJsh bond in the amount of $7,500 as surety that trench is
restored to the City's satisfactionf
4. Said water line shall be installed t a minimum depth of thirty (30) inches.
5. The owner shall deposit the non refundable sum of One Thousand Nine Hundred Dollars
($1,900.00) as a one-time payment into the Open Space Maintenance District No.4 Fund as
compensation for the use of the ity's open space.
6. To minimize disturbance to the ar a, the trenching work shall be done with hand tools. No
motorized, wheeled, treaded, or imilar vehicles are allowed into City's open space.
7. Any areas, including irrigation sys ms, disturbed or destroyed by the work shall be restored
to its original condition.
8. Disturbed areas must be reseeded with a seed mixture approved by the Parks Department.
9. Owner shall hold harmless and ndemnifY the City against all claims arising from the
installation and maintenance of th water line.
10. Owner shall be solely responsible or restoring any surface features, including landscaping,
in the case of rupture of the pipe caused by deterioration or damage through construction
activities, which could have been voided by marking out its existence.
11. City agrees that no buildings and or structures will be erected, walls constructed, fences
built, or trees planted upon the w ter service easement.
12. City shall not change the grades of, lor allow other utilities within said easement without prior
permission of Owner. '
Ido.;3
Page 4, Item -
Meeting Date 8/5/97
13. Owner agrees that his property s~all be added to Open Space Maintenance District No.4
(Bonita Ridge Estates).
14. The owner shall install a metall~ tape in the trench, above the water line for detection
purposes when locating undergr und utilities.
15. ""'= ,fuill pm"'" C;ry Wi~ ' fuo<imi'" """"'" oc """" mæ", of i_di",
notification in the event City is co tacted for mark-out of utilities, so that City may contact
the owner to mark out water s rvice line. Mark-out of the water service line is the
owner's sole responsibility. i
Mr. Chavez has read and signed the agr~ement and concurs with all conditions. The agreement
becomes an integral part of the grant of e<ifement to the owner and will be recorded with that grant.
Staff had the proposed easement appraised¡ by the City's contract appraiser in 1992. It was a verbal
estimate to obtain a range and was not basþd on an official appraisal. The appraiser stated that the
lands in the Eastern Territories would be Jorth $5,000 to $10,000 per acre. The figures reflect the
fact that the land is open space and not de~elopable. Staff therefore recommends that the owner be
required to pay into the Open Space Main~enance Distric Fund an amount equal to the high end of
the range prorated to 7,500 square feet (19ft. wide. x 750 ft. long.), (0.172 acre), plus 10% for an
approximate inflation factor over a 5-yearlperiod, totaling $1,900.
As may be drawn by the various alternativ~ costs, the owner will save significantly through the use
of a remote service. Other alternatives njay actually make the project infeasible. Staff feels the
payment of $1,900.00 is a fair amount in ~iew of Mr. Chavez's alternative costs to receive water
service. '
FISCAL IMPACT: Mr. Chavez has s~bmitted a $1,000 deposit to cover staff costs for the
processing of this easement. If Council approves the resolution as presented, the Open Space
Maintenance District Fund for Bonita Ridg~ Estates will increase by $1,900.00, and the assessments
for the home owners in the District will ~ecrease by approximately 5% for one year (based on
current budget amounts).
Attachments: Resolution
Exhibit "A" - Plat of area fOT SCANNED
Exhibit "Boo - Copy of Agr ,ement
H:IHOME\ENGINEER \AGENDA \P ALM - DR.JWH
July 30, 1997 (3:37pm)
Engineering File No. 0490-60-PF-253
;)0-'4
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OWN BY: J¡.
DATE: 7/3/97 EXH/B/ / A"
dD-Ç"
Recording requested by
and please return to:
City Clerk
City of Chula Vista
P.O. Box 1087
Chula Vista, CA 91912
. (This space or Recorder's use, only) .
Affects APN(s) 593-] 11-05 & -12' 593-292-44 c.V. File No. 0490-60-PF-253
AGREEMENT BETWEEN THE
CITY OF CHULA VISTA AND PAUL CHAVEZ
REGARDING GRANT OF EASEMENT FOR
REMOTE WATER SERVICE
IN THE CITY OF CHULA VISTA
This agreement is hereby dated and effective this day of , 199_, and
IS
BY AND BETWEEN: PAUL CHAVEZ, 1227 Kostner Drive, Sand Diego, CA 92154
("Owner")
AND THE CITY OF CHULA VISTA, 276 Fourth Avenue, Chula Vista,
CA 91910 ("City")
RECITALS
A. Owner is the owner of the property commonly known as 4045 PALM DRIVE and further
identified as Tax Assessor's Parcel No. 593-111-05-00 in the unincorporated territory
adjacent to the Chula Vista boundary.
B. Owner has requested that the City grant him an easement for a remote water service through
City Open Space Lot 140 of Bonita Ridge Estates, Unit 3, and Open Space Lot 219 of Bonita
Ridge Estates, Unit 4.
C. City Council may, by resolution, grant easements to private individuals for various purposes,
including utility services.
D. Assurances required of an owner may include that he/she enter into a fonnal agreement with
the City prior to the granting of the easement.
EX' "B"
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COVENANTS
1. Owner and his successors in interest here agree that any grant of easement granted for water
service to Property may be revoked and made null and void at the option of the City in the
event that Owner or his successors in interest object to annexation of Property to Chula
Vista. Owner and his successors in interest agree to pay in full the costs incurred by City,
including attorney's fees, to process said revocation.
2. The cost of any water facility constructed and operated to serve Property shall be borne in
total by Owner. All facilities so constructed shall be built in conformity with the standards
of the City of Chula Vista.
3. Prior to recordation of the Grant of Easement, Owner shall submit to the Department of
Finance of the City a cash bond in the amount of $7,500 as surety that the trench excavated
for the water line is backfilled to original grade, that sufficient compaction is reached (80%
minimum) so that erosion will not occur and that all disturbed growth is restored to the
satisfaction of the City's Department of Parks.
4. Said water line shall be installed at a minimum depth of thirty (30) inches.
5. On or before signing this document, Owner shall deposit the non-refundable sum of One
Thousand Nine Hundred Dollars ($1,900.00) as a one-time payment into the Open Space
Maintenance District No.4 Fund as compensation for the use of the City's open space.
6. To minimize disturbance to the area, the trenching work shall be done with hand tools. No
motorized, wheeled, treaded, or similar vehicles are allowed into City's open space.
7. Any areas, including irrigation systems, disturbed or destroyed by the work shall be restored
to its original condition to the satisfaction of the City's Director of Parks or his designee.
8. Disturbed areas must be reseeded with Pecoff South County, low-fuel seed mix #51, at the
producer's recommended application rate and thoroughly raked into the disturbed soil to the
satisfaction of the City's Director of Parks or his designee.
9. Owner shall indemnify and hold harmless the City and its officers, agents, and employees
against all claims for damages to persons or property arising out of the conduct of the Owner
or his agents, subcontractors, or others in connection with execution of the water facility and
related work covered by this agreement, except only for those claims arising from the sole
negligence or sole willful conduct of the city, its officers, agents, or employees. Owner's
indemnification shall include any and costs, expenses, attorney's fees and liability incurred
by the City, its officers, agents or employees in defending against such claims, whether the
same proceed to judgment or not. Upon written request by the City, Owner shall at his own
expense, defend any such suit or action brought against City, its officers, agents or
employees.
Exhibit "8"
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10. Owner shall be solely responsible for restoring any surface to original grade and its features,
including landscaping and irrigation lines, in the case of rupture of the pipe caused by
deterioration or damage through construction activities, in an instance where damage could
have been avoided by marking out the existence of the pipe.
11. City agrees that no buildings and/or structures will be erected, walls constructed, fences
built, or trees planted upon the water service easement.
12. City shall not change the grades of, or allow other utilities within said easement without prior
permission of Owner.
13. Owner agrees that the property shall be added to Open Space Maintenance District No.4
(Bonita Ridge Estates).
14. Owner shall ensure that a metallic tape is installed in the trench, above the water line for
detection purposes when locating underground utilities. Owner shall call the City's Deputy
Director of Parks prior to backfilling over said metallic tape for inspection of the tape
installation (585-5615).
15. Owner shall provide City with a facsimile number or other means of immediate notification
in the event City is contacted for mark-out of utilities, so that City may contact Owner to
mark out water service line. Mark-out of the water service line is Owner's sole
responsibility.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed the day and
year first hereinabove set forth.
CITY OF CHULA VISTA
Dated: By:
Mayor of the City of Chula Vista
PROPERTY OWNER
Dated:
Paul Chavez
(Attach Notary Acknowledgment)
Approved as to form:
John M. Kaheny, City Attorney
JWH[C:\WP51\PF\WATER_PA.LM]
Exhibit uB"
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RESOLUTION NO.J~?~"
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA GRANTING EASEMENT TO OWNER OF THE
PROPERTY AT 4045 PALM DRIVE FOR REMOTE WATER
SERVICE THROUGH CITY OPEN SPACE AND APPROVING
AGREEMENT WITH SAID OWNER WITH RESPECT TO SAID
WATER SERVICE
WHEREAS, Mr. Paul Chavez, owner of the vacant property at
4045 Palm Drive plans to build a single family home on the parcel;
and
WHEREAS, the most practical and economical way of
receiving water service with sufficient pressure is to have a
remote service installed through City open space; and
WHEREAS, in order to have a meter installed, Sweetwater
Authority requ1.res the owner to provide evidence of a grant of
easement by the City for the pipeline from Greenwood Place, through
two open space lots to the property; and
WHEREAS, an easement granted to Mr. Chavez will not have
an impact on the city's use of the open space area.
NOW, THEREFORE, BE IT RESOLVED the City Council of the
City of Chula Vista does hereby grant an easement to Paul Chavez,
owner of the property at 4045 Palm Drive, for remove water service
through city open space.
BE IT FURTHER RESOLVED that the City Council of the City
of Chula vista does hereby approve an agreement with Paul Chavez
with respect to said water service, a copy of which is on file in
the office of the City Clerk as Document No.-----.
BE IT FURTHER RESOLVED that the Mayor of the city of
Chula vista is hereby authorized and directed to execute said
documents on behalf of the City of Chula Vista.
Presented by Approved as to form by
Q~~~
John P. Lippitt, Director of John M. Kaheny, City Attorney
Public Works
C:\rs\4045Palo.eas
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Southern California Housing liJ Π~' Πn II' ~, ~- '
. Development Corporation n è l:¡ J:,.' , '. \
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A Non-Profit Housing Corporation COi':'CI: f',,;cß . i
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July 14, 1997
Hon. Councilman Rindone
City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 92010
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RE: <~~Il\l~.!or"<C9J!S~~!:!!~!C)..np! ~.£it>:,9!uncil,~orJ,lshop forP~~.I!taJi()n,b)'.~~... ,
Cat. Housing on Co~u,J!Ìty ~evitalizaüon and Provision of Affordable Housing
Through Large Apartment Complex Acquisition, Rehabilitation and Operation
Dear Councilman Rindone:
It was a pleasure to see and talk with you at the Fair Housing Council's Annual Awards Luncheon
recently. And, thank you for meeting with Darrell Brown and me last week to further discuss
Southern California Housing Development Corporation's (So. Cal, Housing) desire to work in
partnership with the City of Chula Vista on community revitalization and the provision of
affordable housing.
We respectfully request consideration of a City Council workshop to provide the Council an
overview of So. Cat. Housing and how we propose to work in partnership with the City.
Specific items to be discussed include:
a. Large apartment complexes actually acquired, rehabilitated and managed by So. Cal, Housing
in City partnership;
b. So. Cal, Housing's role in the process as owner, as property manager and as general
contractor;
c. Overview of social programs and other activities for children, parents and residents on-site;
d Overview of public and private financing sources for large-scale acquisition / rehabilitation;
e. City ofChula Vista apartment market;
f. Develope~ equity; and
g. Mêmoiandum of Understanding should the Mayor and Council choose to move forward.
SAN DIEGO OFFICE
3934 Murphy Canyon Rd., Suite BIG3 San Diego, CA 92123(619) 571-7982Fax (619) 268-4796
8265 Aspen Street Suite 100 Rancho Cucamonga, CA 91730 (909) 483-2444 Fax (909) 483-2448
d3CÀ.. - \
As stated above, one of the above workshop items to be discussed is developer equity. We
understand that the City is requiring for-profit developers to Jmili1 and ~ ~ low-income
units as a condition of approval on their maps. The developer's source of equity could be mill!Y
leveraged and married into other sources to revitalize existing neighborhoods and provide safe,
decent, affordable housing in the older neighborhoods needing stabilization and upgrading. We
would propose to seek comments from the development industry on using this source of equity on
theexisting apartment stock at this workshop.
So. Cal. Housing does not build new low-income housing Rather, we, specialize in achieving
neighborhood revitalization thf(JUgh the acquisition, rehabilitation ofeXist:ÌIÍIÌ large multi-falIÚly
:~p~el!t.c(jIIlPlexêsåîì(f~wilc'ätion of óUrstro~g on-site management '"
So. Cal. Housing is currently providing over 2,300 units of high quality, well maintained housing
.' for people throughout Southern California, making us the largest regional non-profit housing
" . provider in Southern California and one of the largest in the nation.
We look forward to your support in hearing back on '(V~e~ a workshop could be "scheduled.
In the meantime, we will attempt to meet with the Mayor, Councilmembers and staff to show our
desire to work with Chula Vista on community revitalization and provision of affordable housing.
SAN DIEGO OFFICE
3934 Murphy Canyon Rd., Suite BI03 San Diego, CA 92123(619) 571-7982Fax (619) 268-4796
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