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CC - Item 8A - Proposed Underground District Project Walnut Grove Avenue - Rule 20AROSEMEAD CITY COUNCIL STAFF REPORT TO: THE HONORABLE MAYOR AND CITY COUNCIL FROM: JEFF ALLRED, CITY MANAGER DATE: APRIL 26, 2011 SUBJECT: PROPOSED UNDERGROUND DISTRICT PROJECT WALNUT GROVE AVENUE — RULE 20A SUMMARY Rule 20A was developed to carry out a California Public Utility Commission (PUC) decision to encourage local governments to underground overhead electric facilities. The program requires public utility companies to set aside funds on a regular basis for undergrounding of existing overhead facilities. To qualify a project for Rule 20A funding, a city is required to determine that undergrounding of the subject overhead facilities will be in the general public's interest. The City of Rosemead has an approximate current cumulative balance of $1.5 million on deposit with Southern California Edison (SCE), with a continuing annual allowance of $170,459. A proposed location for the underground utility district has been identified along Walnut Grove Avenue (from Marshall Avenue to Valley Boulevard). This location is a significant entry point to the City from the Interstate -10 Freeway. It is expected that the undergrounding project will provide both safety and aesthetic benefits to Walnut Grove Avenue and adjacent areas. Staff Recommendation It is recommended that the City Council: 1. Hold the noticed public hearing and receive public comment; 2. Establish Underground Utility District 2011 -01 (Walnut Grove Avenue from Marshall Avenue to Valley Boulevard) and adopt Resolution No. 2011 -20; 3. Direct staff to notify all affected property owners of the Underground Utility District; and 4. Direct staff to file necessary documents with all affected utility companies. DISCUSSION Background Rule 20A is a set of policies and procedures established by the PUC to regulate and rMM NOo APPROVED FOR CITY COUNCIL AGENDA: City Council Meeting April 26, 2011 Paae 2 of 5 fund the conversion of overhead electric equipment to underground facilities, a process called " undergrounding". Under Rule 20A, undergrounding projects are financed by certain monies set -aside for communities by utility companies. Funding is based upon a CPUC formula. If needed, communities can supplement Rule 20A funds with other funding sources. Generally, Southern California Edison (SCE) owns and maintains most of the power poles in the City. SCE operates two different types of overhead facilities, transmission and distribution lines. The transmission line system provides high voltage service to a large regional area. The distribution line system receives power from the transmission system and makes electricity available at a usable voltage to smaller regional areas. Telecommunication service lines and cable service providers are also found on SCE distribution poles, and service the same parcels as SCE. The process of placing the overhead utilities underground is the responsibility of the respective utility companies involved. SCE, as lead agency, contracts for the excavation of the necessary trenches within the public right -of -way, and installs the conduit and lines for the transmission and distribution of electrical power to consumers. Telecommunications and other service providers using the same poles follow suit by placing their respective facilities in the same trench if it is practical to do so. The cost for trench repair is paid for by the respective utility companies as a part of the underground district costs. Existing overhead connections to adjacent parcels must be done by providing a service lateral which is included in the underground district costs. Connecting to a new service lateral also requires converting the customer /property owners' service meter panel or service entrance to the underground service. The customer /property owner can be responsible to pay for the conversion per Rule 20A guidelines, although it is allowed and recommended that the conversion cost be incorporated into the underground district cost to expedite the efficiency and completion of the project. Once all underground facilities are activated, the respective utility providers remove the overhead lines and the power poles are then pulled from the ground. Developing a New Underground District To qualify for funding, projects must produce a benefit to the general public, not just customers in the affected area, by satisfying one or more of the following criteria: • The location has an unusually heavy concentration of overhead facilities in public and private properties • The location is extensively used by the general public and carries a heavy volume of pedestrian or vehicular traffic • The location qualifies as an arterial or collector road in a local government general plan • The overhead equipment must be located within or pass through a civic, recreational or scenic area City Council Meeting April 26, 2011 Page 3 of 5 The above criteria provides for considerable latitude in identifying potential projects to be funded by Rule 20A. SCE allocates funding to communities based on previous allocations, the ratio of customers served by overhead facilities relative to all customers within the community, and the ratio of customers in the community in comparison to all customers serviced by the SCE. Currently, Rosemead's annual allocation is $170,459, but could slightly vary from year -to -year. Due to limitations of funds, local municipalities usually wait and accumulate their allocations for years before starting an undergrounding project. Previous City Underground Districts Historically, City undergrounding projects funded with Rule 20A funds have concentrated on major thoroughfares or near areas of public interest. A good candidate for undergrounding is a street that will be enhanced for both safety and aesthetics. Since establishing the City's Underground Utility Ordinance (Attachment 2), the City has established 8 underground districts as follows: Underground District Number Year Established General Vicinity 1 1973 Mission Boulevard 2 1978 Garvey Avenue 3 1985 Garvey Avenue 4 1986 Valley Boulevard 5 1995 Del Mar Avenue 6 1995 Walnut Grove Avenue 7 1995 San Gabriel Boulevard 8 1995 San Gabriel Boulevard Selection of Walnut Grove Avenue Staff met with SCE representatives regarding Rule 20A and requested an initiation of a study for the formation of an underground utility district. The study targeted Walnut Grove Avenue from Marshall Avenue to Mission Drive due to the following reasons: • Undergrounding will enhance safety and have a positive aesthetic impact in the area. • The estimated project timing will coincide with planned street rehabilitation work in the area. • The area serves as a major entry point into the City and has already undergone traffic and beautification improvements. Staff requested that SCE prepare a rough order of magnitude (ROM) cost estimate for this project. The ROM cost estimate is $2.70M, based on 2009 prices. Because the project construction will not begin until around 2014, this cost was forward estimated by SCE to be $3.45M, assuming a cost escalation of about 28% for the next four (4) years. City Council Meeting April 26, 2011 Page 4 of 5 However, staff considers that the 28% cost increase is extremely conservative and adjusted this rate to a more reasonable and yet conservative rate of 15 %. This adjustment placed the estimated project cost at $3.10M by the year 2014. Rule 20A allows communities to initiate construction projects based on their projected allocation accrual, up to the start of construction. In addition, the Rule also allows the ,'mortgaging ", or the use of anticipated annual allocations, of up to five (5) future years from start of construction. Following is a cost projection and analysis for the Walnut Grove Avenue project: City of Rosemead Allocation Analysis Estimated Construction Cost 2009 Estimate ............................ ............................... 2014 Estimate ............................ ............................... (Assumes a 15% increase from 2009) Estimated Rule 20A Balance Current Balance ............................ ............................... Projected Future Allocation... .......................................... Annual Allocation $170,000 Projected Start Date 2014 x 4 years $680,000 Projected Mortgaged Allocation ........... ............................... Annual Allocation $170,000 5 -Year Allocation Beyond Start Date x 5 years $850,000 Projected Total Allocation ................ ............................... Potential Differential in Cost ......... ............................... (Shortage Represents City Contribution to Project, if needed) $ 2,700,000 $ 3,100,000 $ 1,520,000 i.•:1 111 $ 3,050,000 $ (50,000) Process Outreach flyers (Attachment 4) were hand delivered to all affected properties adjacent to the proposed underground utility district. In addition, SCE representatives and staff held an informational meeting for the project on March 30, 2011 at 6:30 PM at the City Council Meeting April 26, 2011 Paqe 5 of 5 Rosemead Community Recreation Center. If approved by the City Council, staff will initiate the process with SCE and utility companies to proceed with the underground district. It is estimated that construction will take place in spring 2014 (approximately 3 years from now). FINANCIAL REVIEW SCE will fund this project from the City's current and future accumulated Rule 20A allocation balance, which will amount to approximately $3.05M by the construction date of 2014. Rule 20A provides monetary credit to the City account but this allocation should not be viewed as hard cash that can be used for anything other than utility undergrounding purposes. The City has an annual allocation of approximately $170,000. The Rule 20A program allows the City's to "spend ahead" (mortgage) for five accrual years, allocating an additional amount of $850,000. This will provide a total allowance of approximately $3.05M for this project by the year 2014. Other existing overhead facilities belonging to ATT Communications Inc., Charter Communications Inc. and other private utilities will be relocated underground at the companies' expenses. ENVIRONMENTAL REVIEW The project is categorically exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15304 (a) and (f) of the CEQA Implementing Guidelines. This exemption covers projects involving minor alterations of land that do not have a significant effect on the environment. Prepared by: a 341. 4_c — ?4 Rafael Fajardo Associate Civil Engineer Submitted by: _ (..L Chris Marcarello Public Works Director Attachment 1 —Resolution 2011- 20 Attachment 2 — Rosemead Municipal Code Section 13.20 Attachment 3 — ROM (Rough Order of Magnitude) Letter Attachment 4 - Community Meeting Outreach Flyer Lucien J. LeBlanc City Engineer RESOLUTION NO. 2011- 20 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROSEMEAD TO ESTABLISH UNDERGROUND UTILITY DISTRICT NO. 2011 -01 ON WALNUT GROVE AVENUE BETWEEN MARSHALL AVENUE AND VALLEY BOULEVARD WHEREAS, Chapter 13, Section 13.20 of the City's Municipal Code establishes a procedure for the creation of underground utility districts and requires as the initial step in such procedure holding a public hearing to ascertain whether public necessity, health, safety, or welfare requires the removal of poles, overhead wires, and associated overhead structures and the undergrounding installation of wires and facilities for supplying electric, communication or similar service in any such district; and WHEREAS, it has been recommended that such an underground utility district, herein after called District 2011 -01; and WHEREAS, a public hearing was held by the City Council on April 26, 2011 in the City Council Chambers at 8838 East Valley Boulevard, to ascertain whether public necessity, health, safety, or welfare requires the removal of poles, overhead wires and associated overhead structures and the underground installation of wires and facilities for supplying electric, communication or similar services as more fully shown on the attached Exhibit "A "; and WHEREAS, notice of such hearing has been given to all affected property owners as shown on the last equalized roll and utilities concerned; and WHEREAS, such hearing has been duly and regularly held, and all persons interested have been given an opportunity to be heard. NOW THEREFORE BE IT RESOLVED that the City Council of the City of Rosemead hereby declares and finds the following: Section 1. That the City Council of the City of Rosemead hereby finds and determines that the public necessity, health, safety, and welfare requires the removal of poles, overhead wires and associates overhead structures and the underground installation of wires and facilities for supplying electric, communication or similar service in the areas shown as properties within this area more fully shown on the map as Exhibit "A" and said area is hereby established as Underground Utility District No. 2011- 01. Section 2. That the following exceptions in said Underground Utility District No. 2011 -1 are permissible and are hereby authorized: 1. Equipment appurtenant to underground facilities, such as surface mounted transformers, pedestal mounted terminal boxes and meter cabinets, and concealed ducts. 2. Temporary poles, overhead wires and associated overhead structures used or to be used in conjunction with construction projects. Section 3. That the removal and underground installation is scheduled to start in approximately spring 2014 and to be completed in reasonable time thereafter. Section 4. That the Southern California Edison Company has agreed to charge against the City of Rosemead's Rule 20A allocations all costs of converting to underground each customer's service lateral, and of converting and relocation, as necessary, the overhead service entrance to accept the underground service lateral. Section 5. The City Clerk shall certify as to the adoption of this Resolution. PASSED, APPROVED and ADOPTED by the Rosemead City Council this 26th day of April, 2011. MAYOR ATTEST: CITY CLERK RMC Chapter 13.20 UNDERGROUND UTILITY DISTRICTS Sections: 13.20.010 Short title. 13.20.020 Definitions. 13.20.030 Hearing to establish need for underground utility district. 13.20.040 Designation of underground utility districts. 13.20.050 Unlawful acts. 13.20.060 Exception, emergency or unusual circumstances. 13.20.070 Other exceptions. 13.20.080 Notice to property owners and utility companies. 13.20.090 Responsibility of utility companies. 13.20.100 Responsibility of property owners. 13.20.110 Responsibility of city. 13.20.120 Time extension. 13.20.010 Short title. This chapter shall be known as the "Underground Utility District Ordinance of the City of Rosemead." (Prior code § 11000) 13.20.020 Definitions. Whenever in this chapter the words or phrases hereinafter in this section defined are used, they shall have the respective meanings assigned to them in the following definitions: "Commission" means the Public Utilities Commission of the state of California. "Person" means and includes individuals, firms, corporations, partnerships and their agents and employees. "Poles, overhead wires and associated overhead structures" means poles, towers, supports, wires, conductors, guys, stubs, platforms, cross -arms, braces, transformers, insulators, cutouts, switches, communication circuits, appliances, attachments and appurtenances located aboveground within a district and used or useful in supplying electric communication or similar or associated service. "Underground utility district" or "district" means that area in the city within which poles, overhead wires and associated overhead structures are prohibited as such area is described in a resolution adopted pursuant to the provisions of Section 13.20.040. "Utility" includes all persons or entities supplying electric, communication or similar or associated service by means of electric materials or devices. (Prior code § 11001) 13.20.030 Hearing to establish need for underground utility district. The Council may from time to time call public hearings to ascertain whether the public necessity, health, safety or welfare requires the removal of poles, overhead wires and associated overhead structures within designated areas of the city and the underground installation of wires and facilities for supplying electric, communication or similar or associated service. Prior to holding such public hearing, the City Engineer shall consult all affected utilities and shall prepare a report for submission at such hearing containing, among other information, the extent of such utilities' participation and estimates of the total costs to the city and affected property owners. Such report shall also contain an estimate of the time required to complete such underground installation and removal of overhead facilities. Upon receipt of the report, the City Clerk shall prepare petitions which briefly summarize the Engineer's report for the proposed district or districts. Upon receipt of a petition signed by more than sixty (60) percent of the owners of property as shown on the last equalized assessment roll within a proposed district, the City Council may set a date for the public hearing described herein. The City Clerk shall notify all affected property owners as shown on the last equalized assessment roll and utilities concerned by mail of the time and place of such hearings at least ten days prior to the date thereof. Each such hearing shall be open to the public and may be continued from time to time. At each such hearing all persons interested shall be given an opportunity to be heard. The decision of the Council shall be final and conclusive. (Prior code § 11002) 13.20.040 Designation of underground utility districts. If, after any such public hearing the Council finds that the public necessity, health, safety or welfare requires such removal and such underground installation within a designated area, the Council shall, by resolution, declare such designated area an underground utility district and order such removal and underground installation. Such resolution shall include a description of the area comprising such district and shall fix the time within which such removal and underground installation shall be accomplished and within which affected property owners must be ready to receive underground service. A reasonable time shall be allowed for such removal and underground installation, with due regard for the availability of labor, materials, and equipment necessary for such removal and for the installation of such underground facilities as may be occasioned thereby. (Prior code § 11003) 13.20.050 Unlawful acts. Whenever the Council creates an underground utility district and orders the removal of poles, overhead wires and associated overhead structures therein as provided in Section 13.20.040, it shall be unlawful for any person or utility to erect, construct, place, keep, maintain, continue, employ or operate poles, overhead wires and associated overhead structures in the district after the date when the overhead facilities are required to be removed by such resolution, except as the overhead facilities may be required to furnish service to an owner or occupant of property prior to the performance by such owner or occupant of the underground work necessary for such owner or occupant to continue to receive utility service as provided in Section 13.20.100, and for such reasonable time required to remove the facilities after the work has been performed, and except as otherwise provided herein. (Prior code § 11004) 13.20.060 Exception, emergency or unusual circumstances. Notwithstanding the provisions of this code, overhead facilities may be installed and maintained for a period, not to exceed thirty (30) days, without authority of the Council in order to provide emergency service. The Director of Public Works (City Manager) may grant special permission on such terms as the Director of Public Works (City Manager) may deem appropriate, in cases of unusual circumstances, without discrimination as to any person or utility, to erect, construct, install, maintain, use or operate poles, overhead wires and associated overhead structures. (Prior code § 11005) 13.20.070 Other exceptions. The provisions of this chapter and any resolution adopted pursuant to Section 13.20.040 shall not apply to the following types of facilities, unless otherwise provided in such resolution: A. Any municipal facilities or equipment installed under the supervision and to the satisfaction of the City Engineer; B. Poles or electroliers used exclusively for street lighting; C. Overhead wires (exclusive of supporting structures) crossing any portion of a district within which overhead wires have been prohibited, or connecting to buildings on the perimeter of a district, when such wires originate in an area from which poles, overhead wires and associated overhead structures are not prohibited; D. Poles, overhead wires and associated overhead structures used for the transmission of electric energy at nominal voltages in excess of thirty -four thousand five hundred (34,500) volts; E. Overhead wires attached to the exterior surface of a building by means of a bracket or other fixture and extending from one location on the building to another location on the same building or to an adjacent building without crossing any public street; F. Antennae, associated equipment and supporting structures, used by a utility for fiirnishing communication services; G. Equipment appurtenant to underground facilities such as surface mounted transformers, pedestal mounted terminal boxes and meter cabinets, and concealed ducts; H. Temporary poles, overhead wires and associated overhead structures used or to be used in conjunction with construction projects. (Prior code § 11006) 13.20.080 Notice to property owners and utility companies. Within ten days after the effective date of a resolution adopted pursuant to Section 13.2,0.040, the City Clerk shall notify all affected utilities and all persons owning real property within the district created by said resolution of the adoption thereof. The City Clerk shall further notify such affected property owners of the necessity that, if they or any other person occupying such property desire to continue to receive electric, communication or similar or associated service, they or such occupant shall provide all necessary facility changes on their premises so as to receive such service from the lines of the supplying utility or utilities at a new location, subject to the applicable rules, regulations and tariffs of the respective utility or utilities on file with the Commission. Notification by the City Clerk shall be made by mailing a copy of the resolution adopted pursuant to Section 13.20.040, together with a copy of this chapter, to affected property owners as such are shown on the last equalized assessment roll and to the affected utilities. (Prior code § 11007) 13.20.090 Responsibility of utility companies. If underground construction is necessary to provide utility service within a district created by any resolution adopted pursuant to Section 13.20.040, the supplying utility shall furnish that portion of the conduits, conductors and associated equipment required to be furnished by it under its applicable rules, regulations and tariffs on file with the Commission. (Prior code § 11008) 13.20. 100 Responsibility of property owners. A. Every person owning, operating, leasing, occupying or renting a building or structure within a district shall construct and provide that portion of the service connection on his or her property between the facilities referred to in Section 13.20.040 and the termination facility on or within the building or structure being served. If the above is not accomplished by any person within the time provided for in the resolution enacted pursuant to Section 13.20.040, the City Engineer shall give notice in writing to the person in possession of such premises, and a notice in writing to the owner thereof as shown on the last equalized assessment roll, to provide the required underground facilities within ten days after receipt of such notice. B. The notice to provide the required underground facilities maybe given either by personal service or by mail. In case of service by mail on either of such persons, the notice must be deposited in the United States mail in a sealed envelope with postage prepaid, addressed to the person in possession of such premises at such premises, and the notice must be addressed to the owner thereof as such owner's name appears, and must be addressed to such owner's last known address as the same appears on the last equalized assessment roll, and when no address appears, to General Delivery, City of Rosemead. If notice is given by mail, such notice shall be deemed to have been received by the person to whom it has been sent within forty -eight (48) hours after the mailing thereof. If notice is given by mail to either the owner or occupant of such premises, the City Engineer shall, within forty -eight (48) hours after the mailing thereof, cause a copy thereof, printed on a card not less than eight inches by ten inches in size, to be posted in a conspicuous place on said premises. C. The notice given by the City Engineer to provide the required underground facilities shall particularly specify what work is required to be done, and shall state that if the work is not completed within thirty (30) days after receipt of such notice, the City Engineer will provide such required underground facilities, in which case the cost and expense thereof will be assessed against the property benefited and become a lien upon such property. D. If upon the expiration of the thirty (30) days period the required underground facilities have not been provided, the City Engineer shall forthwith proceed to do the work, provided, however, if such premises are unoccupied and no electric or communications services are being furnished thereto, the City Engineer may in lieu of providing the required underground facilities, authorize the disconnection and removal of any and all overhead service wires and associated facilities supplying utility service to the property. Upon completion of the work by the City Engineer, he or she shall file a written report with the City Council setting forth the fact that the required underground facilities have been provided and the cost thereof, together with a legal description of the property against which such cost is to be assessed. The Council shall thereupon fix a time and place for hearing protests against the assessment of the cost of such work upon such premises, which time shall not be less than ten days thereafter. E. Upon the City Council's fixing of a time and place for the hearing of such protests, the City Engineer shall immediately give a notice in writing to the person in possession of such premises, and a notice in writing thereof to the owner thereof, in the manner hereinabove provided for the giving of the notice to provide the required underground facilities, of the time and place that the Council will pass upon such report and will hear protests against such assessment. Such notice shall also set forth the amount of the proposed assessment. F. Upon the date and hour set for the hearing of protests, the Council shall hear and consider the report and all protests, if there be any, and then proceed to affirm, modify or reject the assessment. G. If any assessment is not paid within five days after its confirmation by the Council, the amount of the assessment shall become a lien upon the property against which the assessment is made by the City Engineer, and the City Engineer is directed to turn over to the Assessor and Tax Collector a notice of lien on each of the properties on which the assessment has not been paid, and the Assessor and Tax Collector shall add the amount of the assessment to the next regular bill for taxes levied against the premises upon which assessment was not paid. The assessment shall be due and payable at the same time as the property taxes are due and payable, and if not paid when due and payable, shall bear interest at the rate of six percent per annum. (Prior code § 11009) 13.20.110 Responsibility of city. The city shall remove at its own expense all city -owned equipment from all poles required to be removed hereunder in ample time to enable the owner or user of such poles to remove the same within the time specified in the resolution enacted pursuant to Section 13.20.040. (Prior code § 11010) 13.20.120 Time extension. In the event that any act required by this chapter or by a resolution adopted pursuant to Section 13.20.040 cannot be performed within the time provided on account of shortage of materials, war, restraint by public authorities, strikes, labor disturbances, civil disobedience or any other circumstances beyond the control of the actor, then the time within which such act will be accomplished shall be extended by the City Administrator for a period equivalent to the time of such limitation. (Prior code § 110 11) SOUI III UN ( : 4IJr0)1111 EDISON an !'UlM Ll ! A 7 fRG1'I ]iD it � Cmi:pam February 8, 2010 Rafael Fajardo City of Rosemead Public Works Department Subject: Preliminary Rough Order of Magnitude Cost Estimate Rosemead Rule 20A — Walnut Grove Ave between Marshall Avenue to Valley Blvd. Dear Rafael: SCE has reviewed the proposed district and finds the boundary to be operationally acceptable for undergrounding existing overhead distribution facilities. However, to do the length of the project and the amount of allocations available it would seem that two options are the most reasonable at this time. Per the `options discussed' with the City, either shorten the length of the subject undergrounding, or be prepared that construction would not start until 2014. SCE has also prepared a preliminary rough- order -of- magnitude (ROM) cost estimate for the undergrounding of existing overhead facilities within the proposed district boundary. The estimate was prepared without the benefit of any engineering. Therefore, it has an expected accuracy of plus or minus 40 %, and the estimated cost is $3,130,000.00. If further information is necessary, feel free to contact me at (323- 720 -5213) or Dave Seeley at (714) 329 -9317. Sincerely, MARISSA CASTRO - SALVATI Interim Local Public Affairs Region Director 0 J m W IJ J 3AV 3n_ 0b101nNIVM -d IN J J Q I F- a w 0 Of a N w E N N p > p v o a � o Q 2 ° av i E ° @ 0 0. 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