City of Palo Alto (ID # 2947) City Council Staff Report

Report Type: Consent Calendar Meeting Date: 9/10/2012

Summary Title: Amend Resolution of Intent No. 9245

Title: Adoption of an Amendment to Resolution of Intent No. 9245 of the Council of the City of Palo Alto to Set December 10, 2012 as the New Public Hearing Date for the Establishment of Underground Utility District Number 47 (Portions Of Homer, Cowper, Addison, Middlefield, Channing And Webster)

From: City Manager

Lead Department: Utilities

Recommendation Staff recommends that Council approve an amendment to Resolution of Intent No. 9245 setting December 10, 2012 as the Public Hearing date for the establishment of Underground Utility District (UUD) No. 47. Background At its May 7, 2012 meeting, Council adopted Resolution of Intent No. 9245, declaring its intention to amend Section 12.16.020 of Chapter 12.16 of Title 12 of the Palo Alto Municipal Code by establishing UUD No. 47 (City Council Staff Report # 2531). Section 6 of that resolution gave notice that the public hearing would occur on Monday, July 23, 2012. Because of several items already on the agenda on that date and limited time, the proposed public hearing scheduled for July 23, 2012 did not occur. In the meantime, staff has determined that it needs additional time to design the UUD No. 47 project. Staff requests that Council adopt an amendment to Resolution No. 9245. The amendment will establish Monday, December 10, 2012 as the date of the Public Hearing where the Council would hear all protests and receive evidence for and against the action proposed, and determine when and where the Council would consider whether the public necessity, health, and safety require the establishment of the Underground Utility District. Discussion This underground project will result in the removal of 34 poles and provide underground services to 82 residential and commercial properties. Completion of UUD No. 47 will eliminate overhead distribution lines in an area bordered by existing underground utility districts, enhance reliability of electric distribution system, and improve street-view aesthetics. Staff

Report ID#2531 (attached) outlined the process that will be followed once the underground district is created. Timeline The new project schedule resulting from the postponement of the public hearing is shown in the following table.

Action Date

1. Amendment to Resolution of Intent No. 9245 September 10, 2012*

2. Letter to property owners with Resolution of Intent, Payment Option Plan, Service Conversion Cost Estimate, and Update

September 24, 2012

3. Request the Preparation of the Ordinance to Establish Utility Underground District No. 47

October 8, 2012*

4. Public Hearing and First Reading of Ordinance Establishing Project Area as Utility Underground District No. 47

December 10, 2012*

5. Second Reading of Ordinance January 7, 2013*

6. Letter to Property Owners with Approved Ordinance Chapter 12.167 of Municipal Code, and Update

February 11, 2013

7. Award of Construction Contract and Joint Construction Agreement with AT&T/Comcast

July 2013*

8. Substructure (conduits, vaults, etc.) Installation by Contractor

August 2013 through November 2013

9. Installation of Underground facilities (cable, switches, etc.)

December 2013 through March 2014

10. Resolution Determining Properties Electing to Pay Service Conversion Cost over a Period of 10 Years

June 2014 through August 2014

11. Service Conversion Work by Property Owners June 2014 through August 2014

12. Pole Removal and Project Completion September 2014 through November 2014

*Denotes Council Action

Resource Impact The Utilities Department has provided details in Staff Report #2531 regarding the impact on resources due to creation of this underground district. Policy Implications

Amendment to the existing Resolution of Intent does not represent any changes to existing City policy and is consistent with the Council approved Utilities Strategic Plan to invest in utility infrastructure to deliver reliable service. Environmental Review This project is categorically exempt from the California Environmental Quality Act (CEQA) under Section 15302(d) (conversion of overhead electric utility distribution system facilities to underground). Attachments:

Attachment A: UG 47-Boundary Map (PDF)

Amendment B: Amendment to Resolution of Intent No. 9245 (PDF)

Attachment C: City Council Staff Report # 2531 (PDF)

Prepared By: Gopal Jagannath, Supervising Electric Proj. Engineer

Department Head: Valerie Fong, Director

City Manager Approval: ____________________________________

James Keene, City Manager

*NOT YET APPROVED*

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Resolution No. ____Amendment to Resolution No. 9245 of the Council of the City of Palo

Alto to Set December 10, 2012 as the New Public Hearing Date for the Establishment of Underground Utility District No. 47 (Portions Of

Homer, Cowper, Addison, Middlefield, Channing And Webster)

R E C I T A L S

A. At its May 7, 2012 meeting, Council adopted Resolution of Intent No. 9245, declaring its intention to amend Section 12.16.020 of Chapter 12.16 of Title 12 of the Palo Alto Municipal Code by establishing Underground District No. 47 (City Council Staff Report # 2531). B. Although Section 6 of that resolution gave notice that the public hearing would occur on Monday, July 23, 2012, because of several items already on the agenda on that date and limited time, the proposed public hearing scheduled for July 23, 2012 did not occur. C. In the meantime, staff has determined that it needs additional time to fully design the Underground District No. 47 project and requests that Council adopt an amended Resolution No. 9245 setting Monday, December 10, 2012 as the date of the Public Hearing where the Council would hear all protests and receive evidence for and against the action proposed, and when and where the Council would consider and finally determine whether the public necessity, health and safety require the establishment of Underground Utility District No. 47. The Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. In its opinion, the public necessity, health and safety require, and it is the intention of the Council, pursuant to Section 12.16.040 of Chapter 12.16 of Title 12 of the Palo Alto Municipal Code (“Code”), to amend Section 12.16.020 of Chapter 12.16 of the Code, by ordering the establishment of an Underground Utility District (“District”) and to prohibit the construction in and require the removal from the proposed District of all poles and overhead lines and associated overhead structures used or useful in supplying electric, communication or similar and associated services. SECTION 2. The number of the proposed District is Underground Utility District Number 47 of the City of Palo Alto, commonly known to include street and avenue portions of Homer, Cowper, Addison, Middlefield, Channing and Webster. SECTION 3. The description of the area comprising the District is as follows:

“All of the area in the County of Santa Clara, City of Palo Alto, encompassing the areas contiguous with portions of the following avenues, roads, and streets: Homer, Cowper, Addison, Middlefield, Channing and Webster, all as more particularly described on that

*NOT YET APPROVED*

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certain map entitled “Proposed Underground Utility District No. 47 Homer/Cowper/Addison/ Middlefield/Channing/Webster,” on file in the office of the City Clerk.”

SECTION 4. From and after the effective date of the establishment of the proposed District, no person or utility shall erect or construct within the District any pole, overhead lines or associated overhead structure used or useful in supplying electric, communication or similar associated services. SECTION 5. Within ninety (90) days from the date of the completion and acceptance of the proposed underground facilities within the District to be constructed by the City of Palo Alto, Comcast of California IX, Inc. and Pacific Bell Telephone Company dba AT&T California, all poles and overhead lines and associated structures used or useful in supplying electric, communication or similar and associated services in the proposed District shall be removed, and from and after the date no person or utility shall use or maintain such facilities within the proposed District. Additional notice shall be given after the completion date has been precisely determined. SECTION 6. NOTICE IS HEREBY GIVEN that Monday, the 10th day of December, 2012, at the hour of 7:00 p.m., in the regular meeting place of its City Council, Civic Center, Palo Alto, California, is hereby fixed as the time and place when and where the Council shall hear all protests and receive evidence for and against the action herein proposed, and when and where the Council shall consider and finally determine whether the public necessity, health and safety require the establishment of the District and the removal of poles, overhead wires, and associated overhead structures, and the underground installation of wires and facilities for supplying electric, communication and similar or associated services in the District hereinabove described. SECTION 7. At the public hearing, all persons interested shall be given an opportunity to be heard. The hearing may be continued from time to time as determined by the Council. SECTION 8. The Electrical Engineering Manager, Department of Utilities, City of Palo Alto, is hereby designated as the person to answer inquiries regarding the protest proceedings, to be had herein and may be contacted during regular office hours at 1007 Elwell Court, Palo Alto, California, 94303, or by calling (650) 566-4548. SECTION 9. The City Clerk shall give notice of the public hearing by publishing notice of the public hearing and the director of utilities shall mail copies of this resolution to all property owners within the proposed District as shown on the last equalized tax roll of the City, and to all utilities supplying electric, communication or similar or associated services within the proposed District, the mailing to be completed at least thirty (30) days prior to the date of the public hearing. The Clerk is authorized to include in the notice to be mailed a statement to the effect that any affected property owner has the option of paying the cost of converting his or

*NOT YET APPROVED*

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her or their service connection to underground locations over a period of years. Such notice shall conform to Section 12.16.092 of Chapter 12.16 of Title 12 of the Code. SECTION 10. This project is categorically exempt from CEQA under Public Resources Code Section 15302(d) (Conversion of overhead electric utility distribution system facilities to underground). INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ______________________________ _________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ______________________________ _________________________ Senior Deputy City Attorney City Manager _________________________ Director of Utilities

City of Palo Alto (ID # 2531) City Council Staff Report

Report Type: Consent Calendar Meeting Date: 5/7/2012

May 07, 2012 Page 1 of 4 (ID # 2531)

Summary Title: Underground District No. 47 Resolution

Title: Adoption of a Resolution of Intent to Establish Underground Utility District No. 47( Middlefield Road/ Addison Ave/ Cowper Street/ Homer Ave) by Amending Section 12.16.020 of the Palo Alto Municipal Code

From: City Manager

Lead Department: Utilities

Recommendation Staff recommends that the Council adopt the attached Resolution of Intent to establish Underground Utility District No. 47 (UUD 47) by amending Section 12.16.020 of Chapter 12.16 of Title 12 of the Palo Alto Municipal Code. Background The Electric Utility’s undergrounding project areas are selected and recommended to Pacific Bell Telephone Company dba AT&T California (AT&T) and Comcast of California IX, Inc. (Comcast), the two other entities participating in undergrounding projects, based on the age and maintainability of the existing overhead electric system. AT&T and Comcast determine whether the recommended areas meet their criteria for undergrounding based on guidelines established by the California Public Utilities Commission (CPUC) and qualify for financial contribution to the project. UUD 47 is bounded by Middlefield Road, Addison Avenue, Cowper Street, and Forest Avenue (see Attachment B). The area proposed as UUD 47 integrates with the existing neighborhood, where the overhead utility lines are already underground, and is one of the few remaining areas that meet both City and CPUC guidelines for undergrounding overhead utility lines and therefore where AT&T and Comcast will share in the cost of construction. At Council’s request, Staff is in the process of developing a comprehensive plan and strategy for undergrounding the overhead utilities for the remainder of the City. The attached Attachment C provides additional background and history on undergrounding of electric utilities. Discussion The formation of UUD 47 will result in the removal of 34 utility poles and provide underground service to 82 properties, mostly residential, of which a small percentage are commercial

May 07, 2012 Page 2 of 4 (ID # 2531)

properties. Completion of formation of UUD 47 will eliminate overhead distribution lines in an area bordered by existing underground utility districts, enhance reliability of the electric distribution system, and improve street-view aesthetics. Once the underground utility district is created, the Utilities Department will design and obtain bids for the installation of the underground substructure required prior to placing the overhead electric, telephone, cable TV (CATV), street light and City communication facilities underground. After the new underground systems (cable, transformers, switches, etc.) have been installed, the property owners will connect to the new underground system, utilizing their own contractors. City crews will then remove the overhead power lines, and telephone crews will complete the project by removing the remaining telephone and CATV overhead facilities and the poles. City staff is currently in discussion with AT&T concerning the allocation of costs and responsibilities for joint trench applications. As both parties agree that joint participation on projects is mutually beneficial, these discussions should not have an impact on the timeline of the project. The discussions are on-going, but staff does not foresee a significant change in cost allocation for projects with joint trench participation from AT&T. On February 1, 2011, a letter was sent to the property owners in the proposed district, introducing the project and inviting them to a meeting. During the March 10, 2011 meeting (attended by 19 property owners), staff explained the details of the project and answered questions from the property owners. A questionnaire, which was included with the letter, was used to determine the level of support for the project. Staff has received completed questionnaires from 33 property owners, 17 (52%) of whom are in favor of the project, 12 (36%) of whom are not in favor of the project, and 4 (12%) having no preference. Timeline The first step in the establishment of the district is the Council’s adoption of a Resolution of Intent to establish Underground Utility District No. 47. The Resolution defines the district boundaries and sets a time and place for a public hearing on the matter. The public hearing has been tentatively scheduled for the City Council meeting on July 23, 2012. At the public hearing, the property owners will have an opportunity to comment on the project. The adoption of the Resolution of Intent will also serve as a formal action that is required by AT&T and Comcast prior to starting engineering design.

Action

Date

1. Resolution of Intent to establish Underground District No. 47

May 7, 2012*

2. Letter to property owners with Resolution of Intent, Payment Option Plan, Service Conversion cost Estimate, and update

May 14, 2012

May 07, 2012 Page 3 of 4 (ID # 2531)

3.

Request the preparation of the Ordinance to establish underground district

June 22, 2012*

4. Public Hearing July 23, 2012*

5.

Second Reading of Ordinance August 6, 2012*

6.

Letter to property owners with approved Ordinance, Chapter 12.167 of Municipal Code, and update

September 7, 2012

7. Award of construction contract and Joint Construction Agreement with AT&T/Comcast

January 2013*

8. Substructure (conduits, vaults, etc.) installation by Contractor

February 2013 through July 2013

9. Installation of underground facilities (cable, switches, etc.)

August 2013 through October 2013

10. Resolution determining properties electing to pay service conversion cost over a period of 10 years

December 2013*

11. Service conversion work by property owners January 2014 through March 2014

12. Pole removal and project completion June 2014 through August 2014

* Denotes Council Action

Resource Impact Funds for UUD 47 are included in the FY 2008-09 and 2009-10 Utilities Department Electric Capital Improvement Program budget. Due to resource constraints this project was not started during the year it was budgeted. Funds allocated for this project have been carried forward into FY 2011-12 & 2012-13. The only cost to the property owners will be that of replacing the overhead service drops to their buildings with underground service. It is estimated that the average cost per property owner will be approximately $5,000. Property owners will be offered the option of financing their service conversions under Section 12.16.091 of Palo Alto Municipal Code which provides for City loans to property owners to fund the service conversions. Property owners repay the loan and administrative costs, which are added to their property tax bills, over a ten-year period, at an interest rate approved by the Council. Policy Implications The resolution of intent does not represent any change to existing City policy and is consistent with the Council-approved Utilities Strategic Plan to invest in utility infrastructure to deliver reliable service. Environmental Review

May 07, 2012 Page 4 of 4 (ID # 2531)

This project is categorically exempt from CEQA under Section 15302(d) (conversion of overhead electric utility distribution system facilities to underground).

Attachments:

Attachment A - Resolution of Intent for Underground Utility District 47 (PDF)

Attachment B - UG 47 (Boundary Map) (PDF)

Attachment C - Background & History on Undergrounding of Electric Utilities (PDF)

Prepared By: Patrick Valath, Management Specialist Department Head: Valerie Fong, Director City Manager Approval: ____________________________________ James Keene, City Manager

*NOT YET APPROVED*

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Resolution No. Resolution of the Council of the City of Palo Alto Declaring its Intention to Establish Underground Utility District Number 47 (Portions Of Homer, Cowper, Addison, Middlefield, Channing And Webster) By Amending Section 12.16.020 Of Chapter 12.16 of Title 12 of the Palo Alto Municipal Code

The Council of the City of Palo Alto does RESOLVE as follows: SECTION 1. In its opinion, the public necessity, health and safety require, and it is the intention of the Council, pursuant to Section 12.16.040 of Chapter 12.16 of Title 12 of the Palo Alto Municipal Code (“Code”), to amend Section 12.16.020 of Chapter 12.16 of the Code, by ordering the establishment of an Underground Utility District (“District”) and to prohibit the construction in and require the removal from the proposed District of all poles and overhead lines and associated overhead structures used or useful in supplying electric, communication or similar and associated services. SECTION 2. The number of the proposed District is Underground Utility District Number 47 of the City of Palo Alto, commonly known to include street and avenue portions of Homer, Cowper, Addison, Middlefield, Channing and Webster. SECTION 3. The description of the area comprising the District is as follows:

“All of the area in the County of Santa Clara, City of Palo Alto, encompassing the areas contiguous with portions of the following avenues, roads, and streets: Homer, Cowper, Addison, Middlefield, Channing and Webster, all as more particularly described on that certain map entitled “Proposed Underground Utility District No. 47 Homer/Cowper/Addison/ Middlefield/Channing/Webster,” on file in the office of the City Clerk.”

SECTION 4. From and after the effective date of the establishment of the proposed District, no person or utility shall erect or construct within the District any pole, overhead lines or associated overhead structure used or useful in supplying electric, communication or similar associated services. SECTION 5. Within ninety (90) days from the date of the completion and acceptance of the proposed underground facilities within the District to be constructed by the City of Palo Alto, Comcast of California IX, Inc. and Pacific Bell Telephone Company dba AT&T California, all poles and overhead lines and associated structures used or useful in supplying electric, communication or similar and associated services in the proposed District shall be removed, and from and after the date no person or utility shall use or maintain such facilities within the proposed District. Additional notice shall be given after the completion date has been precisely determined.

*NOT YET APPROVED*

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SECTION 6. NOTICE IS HEREBY GIVEN that Monday, the 23rd day of July, 2012, at the hour of 7:00 p.m., in the regular meeting place of its City Council, Civic Center, Palo Alto, California, is hereby fixed as the time and place when and where the Council shall hear all protests and receive evidence for and against the action herein proposed, and when and where the Council shall consider and finally determine whether the public necessity, health and safety require the establishment of the District and the removal of poles, overhead wires, and associated overhead structures, and the underground installation of wires and facilities for supplying electric, communication and similar or associated services in the District hereinabove described. SECTION 7. At the public hearing, all persons interested shall be given an opportunity to be heard. The hearing may be continued from time to time as determined by the Council. SECTION 8. The Electrical Engineering Manager, Department of Utilities, City of Palo Alto, is hereby designated as the person to answer inquiries regarding the protest proceedings, to be had herein and may be contacted during regular office hours at 1007 Elwell Court, Palo Alto, California, 94303, or by calling (650) 566-4543. SECTION 9. The City Clerk shall give notice of the public hearing by publishing notice of the public hearing and the director of utilities shall mail copies of this resolution to all property owners within the proposed District as shown on the last equalized tax roll of the City, and to all utilities supplying electric, communication or similar or associated services within the proposed District, the mailing to be completed at least thirty (30) days prior to the date of the public hearing. The Clerk is authorized to include in the notice to be mailed a statement to the effect that any affected property owner has the option of paying the cost of converting his or her or their service connection to underground locations over a period of years. Such notice shall conform to Section 12.16.092 of Chapter 12.16 of Title 12 of the Code. // // // // //

*NOT YET APPROVED*

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SECTION 10. This project is categorically exempt from CEQA under Section 15302(d) (Conversion of overhead electric utility distribution system facilities to underground). INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ______________________________ _________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ______________________________ _________________________ Senior Asst. City Attorney City Manager _________________________ Director of Utilities

ATTACHMENT B