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ITEM #16 CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF July 18, 2006 TO: HONORABLE MAYOR AND CITY COUNCIL FROM: ERIC FRASER, WATER/WASTE WATER UTILITY DIRECTOR SUBJECT: ADOPTION OF A RESOLUTION TO APPROVE A PIPELINE CROSSING AGREEMENT WITH UNION PACIFIC RAILROAD COMPANY FOR LICENSE TO CONSTRUCT A 12 -INCH WATER PIPELINE CROSSING DATE: July 11, 2006 BACKGROUND: Transition Properties, LP has applied to the City to develop a parcel of land located at 1700 East Steel Road, parallel to the Union Pacific Railroad ("UPRR") tracks, south of the 1-10 freeway and west of the 1-215 freeway. Transition Properties plans to build a warehouse/distribution facility on the parcel. However, there is no water line connection currently available at the property. DISCUSSION/ANALYSIS: There is an available water line south of the UPRR tracks that can be extended into the lot owned by Transition Properties. In order for a water pipeline extension to be constructed across the UPRR property, the City requires permission from UPRR. To this end, UPRR and the City have negotiated a Pipeline Crossing Agreement (the "Agreement") which will grant the City the necessary license to construct and maintain the water line extension across the UPRR property, at Mile Post 540.06 on the Yuma Subdivision. While it is not an unrestricted easement agreement like we get for most City facilities, staff and the City Attorney have negotiated several revisions to UPRR's standard crossing agreement which are helpful to the City in terms of maintaining access rights and indemnity obligations. UPRR would not agree to additional revisions. What remains are termination rights for UPRR and indemnity obligations for the City which we believe are manageable. UPRR has requested that the City Council adopt a resolution approving the Agreement, so as to provide written evidence of the City Council's approval. FINANCIAL IMPACT: The Agreement requires payment by the City of a one-time License Fee of six thousand dollars ($6,000) and an additional one thousand dollars ($1,000) for clerical, administrative and handling expense for processing the Agreement. The Agreement also requires the City to bear the costs of construction and maintenance of the water pipeline. The City will recover all of its costs for the Agreement and construction from the developer, Transition Properties. The developer will submit payment either directly to UPRR or to the City as reimbursement. Therefore, no financial impact to the City will occur from execution of the Agreement and construction of the water pipeline. RV PUBW STUBBS\716852.2