According to Jay Operations Manager Eric Seib’s report Monday night, the town of Jay has been approached by a development company about extending natural gas service to River Woods Ranch development, a home development concept on Morristown Road.
The development will feature 100-150 approximately 4,000-square-foot homes on 4- acre lots that require stoves, furnaces, dryers, and outside kitchens to cook outside as well.
Florida Gas Utilities (FGU) supplied a cost review on installation to get natural gas out there, with two options for the town to get its investment back.
One option was based on a 2-inch line and one was a 4-inch line, and the difference, respectively, is an $800,000 to $1.5 million cost to the town.
“There is a two-inch line that goes down Nelsontown Road, but not to the end,” said Seib. “It would have to be extended out down Morristown and to the neighborhood, which is a cost of $268,000, plus $560,000 to go into the homes, a more than $800,000 investment from the town.”
The 4-inch line only goes down Highway 4 and to replace the 2-inch line with a 4-inch line to extend there is where the $1.5 million cost figure comes from, Seib said.
For the town to recover that investment over five years, the annual revenue needed would be $53,593.10, which is an annual consumption of 60,000 therms by the new residents at 150 homes averaging 400 therms each a year.
Seib said the problem is the projection is based on the development of 150 homes, and the risk is, over time, lesser than the needed number of homes to recover its investment would be built.
Councilman Wayne Godwin said the town would have to have a grant or a loan or both to do it.
“They need to commit to something before we commit to this,” said Godwin. “Even if they don't have 150 houses, we can't just do this on a whim. They might do 50 house in 10 years, or 20 years.”
Seib said FGU is knowledgeable about gas grants and the town could use them to help with the process, but he will provide multiple updates on the issue, citing that Jay Attorney Steve Cozart would play a major role in the process.
Councilwoman Nina Hendricks said she had read that it was going to be eventually an 800-home development.
“This may be the first phase,” said Hendricks. “But if it's going to more than that, it may be something we need to look at.”
Seib said it's a great opportunity for long-term, which is what the town is looking for, but he doesn't want Jay to get caught putting in the infrastructure without ensuring the revenue will come from it.
Developer agreements hold the developing entity to a certain number of houses and can be beneficial in an agreement like the one being proposed.
In other business, Seib told the council the town passed its annual natural gas pipeline safety evaluation in June.
The town used to pay $7,500 a year to City Services to have oversight for the inspections, but this year used Florida Gas Utilities at $500 a year and were provided great support, according to Seib.
The gas system was found in satisfactory compliance with state and federal natural gas pipeline safety rules in all the areas it was evaluated.
The report said the Jay pipeline system consists of 31.5 miles of steel and plastic mains with 478 service connections, and two sampling points for odorization. There are 19 emergency valves with one gate station.
The next council meeting will be at 6 p.m., July 20, at Jay Town Hall.
