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CC SR 20161018 D - Approval of RPV Overhead Utilities Conversion Plan (Rule 20A)RANCHO PALOS VERDES CITY COUNCIL MEETING DATE: 10/18/2016 AGENDA REPORT AGENDA HEADING: Consent Calendar AGENDA DESCRIPTION: Consideration and possible action to approve, in concept, the proposed City of Rancho Palos Verdes' Overhead Utilities Conversion Plan. RECOMMENDED COUNCIL ACTION: (1) Approve, in concept, the proposed City of Rancho Palos Verdes' Overhead Utilities Conversion Plan; and, (2) Authorize Staff to schedule a public hearing for the City Council to declare, by resolution, the designated areas for an underground utility district in the City of Rancho Palos Verdes. FISCAL IMPACT: None Amount Budgeted: N/A Additional Appropriation: N/A Account Number(s): N/A ORIGINATED BY: Mike Gibson, Senior Administrative Analyst REVIEWED BY: Michael Throne, PE, Director of Public Works tw APPROVED BY: Doug Willmore, City Manager,/'-``', ATTACHED SUPPORTING DOCUMENTS: A. Background Information Regarding Undergrounding of Overhead Utilities (page A-1) B. Feasibility Review by Harris & Associates, Inc. — Rule 20(A) Utility Undergrounding District for the City of Rancho Palos Verdes (page B-1) C. Summary of Existing Overhead Utility Facilities in the City (page C-1) D. Proposed Utility Undergrounding Locations (page D-1) E. Overhead Maps of Proposed Utility Undergrounding Locations (page E-1) F. Site Maps of Proposed Utility Undergrounding Locations (page F-1) G. Letter of Support for Proposed Utility Underground Location from the Rancho Crest Homeowners' Association (page G-1) BACKGROUND AND DISCUSSION: The City of Rancho Palos Verdes has an opportunity to underground overhead electric and telecommunication lines utilizing funds reserved by Southern California Edison (SCE) as part of its Rule 20A program. The City currently has an available balance of $1.3 million and that balance is expected to grow to $1.9 million over the next five years, 1 which is the earliest SCE would be able to begin to undertake any utility undergrounding projects in the City. To prepare for that time, the City hired a consultant, Harris & Associates, Inc., to conduct a feasibility study for the undergrounding of existing overhead utilities in the City (Attachment B). The study identified a total of 30 candidate locations throughout the City that could benefit from undergrounding of facilities (Attachment C). Public Works Staff further analyzed the relative cost and benefit of each of these locations and, based on this review, is recommending the following two areas of the City be conceptually approved by the City Council tonight for undergrounding of overhead facilities (Attachments D, E, and F): 1. Palos Verdes Drive South (between La Rotonda Drive and the City limit with Los Angeles); and, 2. Crenshaw Boulevard (between Crest Road and Valley View Road). On March 10, 2016, the Infrastructure Management Advisory Committee (IMAC) received an educational tutorial on the overhead utilities conversion program and process (Attachment A). On July 14, 2016, Staff presented the proposed underground utility district to the IMAC. The district that is being recommended to the City Council tonight incorporates the IMAC's comments. This item was originally on the August 16, 2016 City Council agenda; however, due to time constraints it was not acted on by the City Council at that time. If the City Council approves the conceptual areas for undergrounding, a public hearing would be scheduled for formal affirmation and approval of these undergrounding locations, by City Council resolution. After this action, direction would be provided to SCE to commence design and construction of the undergrounding work. Information received from SCE indicates that, due to the limited funding available and the extent of the undergrounding project queue, it will be five to seven years before SCE would commence design and construction. A letter of support from the Rancho Crest Homeowners' Association for the proposed Crenshaw Boulevard undergrounding location was received on August 10, 2016 (Attachment G). ALTERNATIVES: In addition to the Staff recommendations, the following alternative is available for the City Council's consideration: Select other areas from the list of candidate locations identified in the Harris & Associates study, and direct Public Works to bring those areas back to the City Council for formal affirmation and approval. 2 BACKGROUND INFORMATION REGARDING UNDERGROUNDING OF OVERHEAD UTILITIES: The City of Rancho Palos Verdes has recognized the need for undergrounding of overhead utility facilities with the establishment of four Underground Utility Districts in the past: Palos Verdes Drive South (from Forrestal Dr. to Palos Verdes Dr. East) — Established in 1975 2. Forrestal Drive Undergrounding District (not an arterial road but a collector road) — Established in 1975 3. Palos Verdes Drive West Undergrounding District — Established in 1976 4. Hawthorne Blvd. Undergrounding District (from Indian Peak Rd. to Indian Valley Rd.) — Established in 1986 In addition, there are three City documents that address undergrounding of overhead utilities: • City's Current General Plan — recognizes the need to effectively plan for the future undergrounding of existing overhead facilities. • Guidelines to Underground Utilities in Residential Neighborhoods — approved by the City Council in May 2005 (copy included as part of Harris & Associates Feasibility Report). • Chapter 12.12 of the Rancho Palos Verdes Municipal Code — provides the guidelines and process for establishing Underground Utility Districts in the City (copy included as part of Harris & Associates Feasibility Report). Some of the downsides of overhead utilities are listed below: • Vulnerable to damage caused by natural and man -caused conditions: - High winds - Lightning - Tree growth - Automobile accidents • Any of the above factors can cause power outages and, in some cases, safety hazards, if power poles/lines are severed or broken • Overhead utilities also cause considerable disturbance to views A-1 Since 1967, the underground conversions of existing overhead utilities within cities in California have been performed under California Public Utilities Commission (CPUC) Rule 20, which has three parts: Rule 20A — Utility providers (Southern California Edison, in our case) pay for a majority of the costs of undergrounding the utilities using ratepayer funds. Projects are typically in areas of the community that are most used by the general public (i.e., along major arterial roads). Note: The City of RPV's current Rule 20A allocation balance is $1.3 million ($1.9 million projected out to 2021). • Rule 20B — Property owners or developers pay 80% of the costs of utility undergrounding projects. Projects usually involve larger developments or neighborhoods that don't meet the Rule 20A criteria. • Rule 20C — Property owners pay the entire cost of the utility undergrounding, less a credit for the salvage value of removed facilities. Steps required to establish a utility undergrounding district: 1. Conduct a study to determine that the undergrounding of existing overhead utilities will be in the public's interest (Attachments B and C). (completed) 2. Receive concurrence from Southern California Edison (SCE) that it has set aside sufficient Rule 20A funds for the proposed undergrounding locations. (completed) 3. Create a Utility Undergrounding District by City Council resolution that meets at least one of the following criteria: a. The undergrounding will avoid a heavy concentration of overhead utility facilities. b. The street(s) to be undergrounded must be at least one block (or 600 feet) in length. c. The street(s) must be heavily traveled by pedestrian or vehicular traffic. d. The street(s) must adjoin a civic area, a recreation area, or an area of unusual scenic interest. e. The street(s) must be identified as an arterial or collector street in the City's General Plan. The priority undergrounding utility locations (Attachments D and E) that were selected by Staff from the feasibility study conducted by Harris & Associates, Inc. are: 1. Palos Verdes Drive South (between La Rotunda and the City limits); and 2. Crenshaw Blvd. (between Crest Rd. and Valley View Rd.) A-2 WORKING DRAFT—FOR REVIEW ONLY FEASIBILITY REVIEW for Rule 20A Utility Undergrounding Program forthe City of Rancho Palos Verdes Los Angeles County, California July 8, 2016 WORKING DRAFT—FOR REVIEW ONLY Introduction.................................................................................................................................................. 2 Existing Overhead Facilities on Arterial and Collector Streets.....................................................................3 Cost to Underground Overhead Transmission Facilities...............................................................................4 DistributionFacilities................................................................................................................................4 Service Panel Conversion..........................................................................................................................4 Combined Distribution and Transmission Facilities................................................................................10 OtherUtilities..........................................................................................................................................11 Undergrounding using Rule 20A Funds......................................................................................................11 ProjectPrioritization...............................................................................................................................12 UndergroundingProcess.............................................................................................................................12 Other Financing Options under Tariff Rules 20B and 20C..........................................................................13 Inter -Municipal Trading of Tariff Rule 20A Credits.....................................................................................14 Establishment of Local Surcharge for Undergrounding..........................................................................14 Appendix.....................................................................................................................................................16 Appendix A — Chapter 12.2 — Underground Utility Districts...................................................................16 Appendix B — Rule 20 — Replacement of Overhead with Underground Electric Facilities ......................16 Appendix C - City of Rancho Palos Verdes, Underground Utilities Guidelines.......................................16 1 Rule 20A Utility Undergrounding Program City of Rancho Palos Verdes July, 2016 The City of Rancho Palos Verdes has recognized the need to effectively plan for the future undergrounding of existing overhead utilities within the community. As stated in the City's current General Plan: "...overhead transmission lines, transformers, and associated poles do pose significant adverse visual qualities and potential safety hazards. Overhead wires and associated hardware are vulnerable to damage caused by natural conditions, such as high winds, lightning, and tree growth, and man -caused conditions such as automobile accidents, thereby creating power outages and, in some cases, safety hazards if severed or broken. In addition, overhead wires are an unsightly vestige of a necessary infrastructure component, and cause considerable disturbance to views". Since 1967, the underground conversions of existing overhead utilities within cities in California have been performed under California Public Utility Commission (CPUC) Rule 20 which has three parts: Rule 20A, Rule 2013, and Rule 20C which are further described below. ® Rule 20A - Under the Rule 20A program, the utility provider pay for a majority of the cost of utility undergrounding using ratepayer funds. Projects are typically in areas of a community that are used most by the general public. Under CPUC's and the utility's rate tariff, to qualify for Rule 20A funding, a project must meet the following provisions: 1. The agency has determined, through public hearings and consultation with its utility provider, that undergrounding is in the general public interest by improving the safety or aesthetics of roads, sidewalks, civic areas, recreational areas, or scenic points of interest that are extensively used by the public at large. 2. All existing overhead communication and electric distribution facilities will be removed on both sides of the street from the project area upon the completion of work. 3. All adjacent property owners will install electric service panels, lateral lines, and other facilities needed to receive underground service prior to discontinuation of overhead service, and at their own expense (possible financial assistance is sometimes available), and 4. At least one of the following conditions apply: the undergrounding will avoid a heavy concentration of overhead facilities, the street to be undergrounded must be at least one block or 600 feet, the street is heavily travelled by pedestrian or vehicular traffic, Rule 20A Utility Undergrounding Program City of Rancho Palos Verdes July, 2016 the street adjoins a civic area, a recreation area or an area of unusual scenic interest, and/or The street is an arterial or collector in the General Plan. • Rule 2.0B - Under Rule 2013, property owners or developers pay to subsidize undergrounding project costs. Rule 20B projects usually involve larger developments or even neighborhoods which do not fit the Rule 20A criteria. Under Rule 2013, the applicant is responsible for the installation of the conduit, substructures, boxes, service panels and costs associated with completing installation of the underground system. Rule 20B monies can be used to subsidize local government funds. The electric utility credits the project the cost of anew equivalent overhead system. Under Rule 2013, the utility typically pays about 20% of the costs of undergrounding and the property owners pay about 80% of the costs. • Rule 20C - Under Rule 20C, property owners pay the entire cost of utility undergrounding, less a credit for the salvage value of removed facilities. Rule 20C projects are usually smaller projects involving a few property owners, where neither Rule 20A nor Rule 20B applies. The costs are borne almost entirely by the applicants, less a credit for the salvage value of removed facilities. This report represents the first step in the development of a Master Plan for the conversion of existing overhead utilities to underground facilities that are eligible for Rule 20A funding. Existing Overhead Facilities on arterial and Collector Streets A preliminary review of the City's arterial and collector streets was made to identify where there are existing overhead utility lines that would be eligible for Rule 20A funding. SCE operates two different types of overhead facilities within the City, namely transmission and distribution lines. The transmission line system provides high voltage service to a larger regional area. The distribution line system receives power from the transmission system and makes electricity available at a usable voltage to smaller service areas. In some areas, both transmission and distribution lines are co -located on the same poles. It is estimated that there are a total of approximately 25,500 linear feet of existing overhead SCE facilities within the City that are located adjacent to the arterial and collector streets that are eligible to be funded under Rule 20A. Figure 1 shows the locations along the City's arterial and collector streets where there are existing overhead facilities. 3 Rule 20A Utility Undergrounding Program City of Rancho Palos Verdes July, 2016 Cost to Underground Overhead Transmission Facilities Undergrounding of overhead utilities can be very expensive. Estimated costs can average $4-5 million per mile depending upon the type of facilities to be undergrounded, site conditions, whether the costs of service conversions will be paid using Rule 20A funds and other factors. Distribution Facilities It is estimated that there are approximately 23,375 linear feet of existing overhead distribution lines located adjacent to arterial and collector streets within the City that are eligible for undergrounding using Rule 20A funds. Based upon recent costs for undergrounding existing overhead distribution facilities in other SCE jurisdictions, the costs to underground all existing facilities is estimated to be $21.0 million at an average of cost of $ 900/linear foot. Service Panel Conversion The service panel conversion cost is typically funded by the individual property owner. They are responsible for preparing the panel to receive underground service and to install the service conduits from the panel to the property line. For Rule 20A projects there is a provision where this cost can be funded by the allocation. For Rules 20B and C projects, the service panel costs are the responsibility of the property owner. 4 LTJ C] c T O Q = S U C W -� E 7 Q Q 21 O C C (D E c as q E Q U) ? o m 0 N C Sn to -� 9Ab NCD L31$gM L L in � co p Z -' L Q Q) a) OA - _0 c y/ E Nit P'` 05 Oco it .ai_ c i CO `, - � C/ el ry 4- v \ a-+ N cn y 3 U O CL o h mm c � o c J 'D u) 111 ._ a 0 N d j pa Q U O m - m E c Q o� E Q ou = a j C:. m O U ca+ U 04 W w y N 0 , x p 2 W c p � xx Q' W N Q N O 00 2 N ro 2 —' mm YYZ mm os@ 0- mm U) co L 0) \- U o O ^i6 2) L.1_ a) C U � C Co O = N 50 CL 0 ^L LL 0 C:N O o N c j l/1 JE 'a Q N c0 N N> O U � m 0 N M 1 1 C 0 U Q D O �m Q = � N U N >>N c� W c o CL In N 2 N Z a00 ul co � 2 L 3 cn — Rule 20A Utility Undergrounding Program City of Rancho Palos Verdes July, 2016 Combined Distribution and Transmission Facilities It is estimated that there are approximately 8,100 linear feet of existing combined overhead distribution and transmission lines located adjacent to arterial and collector streets within the City that are eligible for undergrounding using Rule 20A funds. Based upon recent costs for undergrounding combined overhead distribution and transmission facilities in other SCE jurisdictions, the costs to underground all combined distribution and transmission facilities is estimated to be $ 22.7 million at an average of cost of $2,800/linear foot . This assumes that only the distribution facilities would be undergrounded, and that the transmission lines would remain overhead. Figure 2 shows the estimated costs by location. Figure 2 Summary of Existing Overhead Facilities and Estimated Undergrounding Costs 10 B-11 APPROX EST. AVG ESTIMATED ID STREET NAME BEGIN END LENGTH TYPE $�Ft COSTS ARTERIAL STREETS 1 CRENSHAW BOULEVARD CREST ROAD CRESTRIDGE RD 1800 Transmission N/A N/A 2 CRENSHAW BOULEVARD CRESTRIDGE RD CITY LIMIT 600 Transmission N/A N/A 3 CREST ROAD LA CROIX DR COUNTRY MEADOW 1500 Transmission N/A N/A 4 CREST ROAD COUNTRY MEADOW HIGHRIDGE ROAD 1550 Transmission N/A N/A 5 CREST ROAD HIGHRIDGE ROAD WHITLEY COLLINS DR 1,950 Transmission N/A N/A 6 CREST ROAD WHITLEY COLLINS DR CRENSHAW BLVD 1,500 Transmission N/A N/A 7 HAWTHORNE BLVD CITY LIMIT BLACKHORSE RD 4,900 Trans. & Distrib. $ 2,800. $ 13,720,000 8 HAWTHORNE BLVD BLACKHORSE RD SILVER SPUR RD 2,250 Trans. & Distrib. $ 2,800 $ 6,300,000 9 PALOS VERDES DR E MIRALESTE PLACE VIACANADA 950 Trans. & Distrib. $ 2,800 $ 2,660,000 10 PALOS VERDES DR E VIA CANADA PICARDIE RD 300 Distribution $ 900 $ 270,000 11 PALOS VERDES DR E PICARDIE RD CORAL RIDGE RD 480 Distribution $ 900 $ 432,000 12 PALOS VERDES DR E CORAL RIDGE RD COLT RD 980 Distribution $ 900 $ 882,000 13 PALOS VERDES DR E COLT RD MARION DR 520 Distribution $ 900 $ 468,000 14 PALOS VERDES DR E MARION DR CLEVIS RD 630 Distribution $ 900 $ 567,000 15 PALOS VERDES DR E CLEVIS RD ROCKINGHORSE RD 1,200 Distribution $ 900 $ 1,080,000 16 PALOS VERDES OR E ROCKINGHORSE RD COACH RD 650 Distribution $ 900. $ 585,000 17 PALOS VERDES DR E COACH RD ROAN RD 1,200 Distribution $ 900 $ 1,080,000 18 PALOS VERDES DR E ROAN RD BRONCO DR 580 Distribution $ 900 $ 522,000 19 PALOS VERDES DR E BRONCO DR HEADLAND DR 450 Distribution $ 900 $ 405,000 20 PALOS VERDES DR E HEADLAND DR SUNNYSIDE RIDGE 1,950 Distribution $ 900 $ 1,755,000 21 PALOS VERDES DR E SUNNYSIDE RIDGE CITY LIMIT 4,130 Distribution $ 900 $ 3,717,000 22 1PALOS VERDES DRS ILA ROTONDA DR ICITY LIMIT 1 1,350 1 Distribution $ 900 $ 1,215,000 COLLECTOR STREETS 23 CRENSHAW BOULEVARD CREST ROAD VALLEY VIEW ROAD 680 Distribution $ 900 $ 612,000 24 RIDGEGATE DRIVE/GRANVIAALTAMIRA HAWTHORNE BLVD MONERO DRIVE 922 Distribution $ 900 $ 829,800 25 INDIAN PEAK ROAD CRENSHAW BLVD NORRIS CENTER DRIVE 1,300 Distribution $ 900 $ 1,170,000 26 MONTEMALAGA DR SILVER SPUR RD BASSWOOD AVE 1,369 Distribution $ 900 $ 1,232,100 27 MONTEMALAGA DR BASSWOOD AVE GRAYSLAKE ROAD 1,029 Distribution $ 900 $ 926,100 28 MONTEMALAGA DR GRAYSLAKE ROAD CITY LIMIT 1,735 Distribution $ 900 $ 1,561,500 29 SILVER SPUR RD BASSWOOD AVE ELKMONT DRIVE 1,440 Distribution $ 900 $ 1,296,000 30 SILVER SPUR RD ELKMONT DRIVE CITY LIMIT 480 Distribution $ 900 $ 432,000 Total $ 43,717,500 10 B-11 Rule 20A Utility Undergrounding Program City of Rancho Palos Verdes July, 2016 Other Utilities Other utilities co -located on the existing SCE poles include SBC Pacific Bell (SBC) communication service lines, and Time Warner and Cox service lines. Under the existing franchise agreements which SBC and the cable companies have with the City, they would be required to underground their facilities at their own costs. Undergrounding using Rule 20A Funds Historically, City -sponsored undergrounding projects funded with Rule 20A funds have concentrated on arterial or collector streets within the City. In order for the utility company to participate in a project using Rule 20A funds to underground their facilities, an "Underground Utility District" must be formally approved and adopted by the City Council. To date the City has formally established four (4) "Underground Utility Districts" which include: • Forrestal Drive Undergrounding District (not an arterial road, but a collector road) — Established in 1975 • Palos Verdes Drive West Undergrounding District — Established in 1976 • Hawthorne Blvd. Undergrounding District (Indian Peak Rd. to Indian Valley Rd.) — Established in 1986 • Palos Verdes Drive South (from Forrestal Dr. to Palos Verdes Dr. East) — Established in 1975 To qualify a project for Rule 20A funds, the City is required to: • determine that the undergrounding of the existing overhead utilities will be in the public's interest, • receive concurrence from SCE that they have set aside sufficient Rule 20A funds for the proposed undergrounding, • create an Underground Utility District by City Ordinance which would require all adjacent property owners to convert their service connections to the undergrounded utilities at their expense, and • meet at least one of the 4 criteria in the rate tariff to qualify for Rule 20A funds which include: o the undergrounding will eliminate a heavy concentration of overhead facilities, o the street to be undergrounded must be at least one block or 600 feet, o the street is heavily travelled by pedestrian or vehicular traffic, o the street adjoins a civic area, a recreation area or an area of unusual scenic interest, and/or o The street is an arterial or collector in the General Plan. 11 B-12 Rule 20A Utility Undergrounding Program City of Rancho Palos Verdes July, 2016 The annual allocation of Rule 20A funds to the City is based upon a formula that compares the above ground facilities to underground facilities and the total number of overhead utility meters within the City in relationship to the total number of overhead utility meters within SCE's service area. The City of Rancho Palos Verdes is currently allocated approximately $135,000 per year for undergrounding of electrical services that are eligible for funding under Rule 20A. The City currently has a balance in its Rule 20A account of $ 1.2 million that could be used for undergrounding. In addition, the City can also "mortgage" up to 5 years of future Rule 20A allocations. Based upon the City's current Rule 20A allocation, it would take several hundred years for the City to have the funds required to underground the remaining overhead utilities eligible for Rule 20A funding. Project Prioritization It is recommended that the City prioritize its list of potential Rule 20A projects based upon the following criteria: 1St Priority — Any previously established "Underground Utility District" that has not been fully funded. 2nd priority — Any project that is adjacent to a major roadway reconstruction project which has an unusually heavy concentration of overhead electrical facilities, not including normal roadway maintenance. Yd Priority — Major arterial or collector streets within scenic view areas 4th Priority — Any street adjacent to public facilities, such as parks or recreation centers, schools or other public facilities. 5th Priority — All other arterial or collector streets where the existing overhead facilities have not been undergrounded Concurrent projects -The undergrounding can be done concurrently with other public works projects such as road widening to be more cost effective and receive additional credit from the utilities. (I.e.: credit for not moving poles) Undergrounding Process The underground process typically consists of four stages, including Public Hearing/Outreach, Design, Notification, and Construction. Each element is described in greater detail below. 12 B-13 Rule 20A Utility Undergrounding Program City of Rancho Palos Verdes July, 2016 Public Hearing/Outreach - Prior to the start of design work, the City Council must create an underground utility district. In accordance with the City's Municipal Code, the City Council holds public hearings in order to create an Underground Utility District (UUD). All residents and property owners with a UUD are mailed a Public Hearing Notice and a map of the proposed UUD location. The Public Hearing Notice informs property owners that they are within an area being considered for undergrounding by the City Council. The notice explains the potential impacts of the project. Any member of the public may attend or speak at a public hearing. Design Process - Once an Underground Utility district has been created, the design process starts. Design typically takes 1-2 years after SCE has approved the project and involves field surveying, utility research, and coordination among impacted utilities. Notification - Prior to the start of undergrounding, residents and property owners will receive additional outreach materials regarding planned construction activities. If trenching on private property is required, utility companies will coordinate right -of -entry permits from property owners. In addition, immediately prior to construction, utility companies will distribute additional construction notices making the public aware of construction dates and times. Construction - Depending on the size of an undergrounding project, construction can range in duration from a few months to over a year. The initial step in construction involves installation of the underground plastic conduit below the surface of the roadway. Trenching may also occur up to individual properties to allow for conversion to underground services. Next, contractors install new utility lines within the conduit and new transformers/pedestals adjacent to trench areas. These boxes are necessary for the underground system and are placed above ground. Once utility lines are installed, each property's electrical panel is modified to allow for underground service and then transitioned from overhead to underground services. Finally, once all properties are moved to underground services, poles are removed in the project area. Tariff Rule 20 includes two other options in addition to Tariff Rule 20A for financing projects: Rules 20B and 20C. Under Rule 2013, SCE ratepayer revenues cover approximately 20 percent of undergrounding project costs and property owners and/or the local jurisdiction cover 80 percent of costs. Under Rule 20C, projects are paid for entirely by property owners, with no ratepayer funds used, though the electric utility is still involved in the installation of the underground wiring. Undergrounding projects approved under these two options are still subject to CPUC regulations and project criteria. The City adopted guidelines in 2005 outlining how property owners can work together at the neighborhood level to see if there is support for undergrounding existing overhead utilities that are not eligible for Rule 20A. See Appendix D for a copy of the City's Guidelines for Utility Undergrounding. 13 Rule 20A Utility Undergrounding Program City of Rancho Palos Verdes July, 2016 Inter -Municipal Trading of Tariff Rule 20A Credits Cities and counties are able to trade or sell unallocated credits, according to representatives from both PG&E and Southern California Edison (SCE). There are examples of municipalities in both service areas selling their unused credits, often for less than the full dollar value of the credits themselves. For example, in July of 2013, the City of Newport Beach entered into a memorandum of understanding (MOU) with the City of Mission Viejo to purchase unallocated Rule 20A credits at a cost of $0.55 on the dollar. Mission Viejo also granted Newport Beach the first right of refusal to purchase future Rule 20A allocations between July 1, 2013 and July 1, 2015 at the same rate of $0.55 on the dollar. In June of 2014, the City of Mission Viejo agreed to sell the City of Newport Beach a balance of $99,143 in Rule 20A funds. Newport Beach will pay Mission Viejo a total of $54,528 for the allocation. Mission Viejo agreed to sell its credits because it did not have undergrounding projects planned for the near future. Similarly, the City of Foster City recently negotiated the transfer of $1.7 million of its Rule 20A credits to the City of Belmont. According to a representative from PG&E, cities and counties in the service area can create agreements between themselves to transfer Rule 20A credits under varying conditions as long as they provide PG&E documentation of the agreements. Establishment of Local Surcharge for Undergrounding Given the limited availability of Rule 20A funds for undergrounding, the City of San Diego working with SDG&E and the CPUC adopted a local surcharge as part of the utility rate structure to fund undergrounding projects. Until 2002, the undergrounding program in San Diego (as in the rest of California) proceeded under CPUC Rule 20-A. But the amount of funding generated for Rule 20-A projects and the expenditure of those funds had significant limitations, including: • the funds can only be used for undergrounding streets that would effect a "general public benefit" (such as arterial rights of way) and generally excludes residential streets; • the funds cannot be used to cover the cities' costs for replaced traffic and street lights, and for trees; and • the funds cannot be used to cover the utility users' costs to connect to the street trench wiring. In 2002, the City of San Diego and SDG&E entered into an agreement (which required the approval of the CPUC) to adopt a small surcharge on the electric bills of all residential power users to provide a stream of revenue that would be sufficient to cover the costs of a phased program to underground all the utility wires on all of the City's residential streets. This was adopted without a ballot measure. 14 B-15 Rule 20A Utility Undergrounding Program City of Rancho Palos Verdes July, 2016 The adoption of a similar program could be considered by the City of Rancho Palos Verdes, or in partnership with other neighboring cities to provide a funding mechanism for an undergrounding program. 15 Rule 20A Utility Undergrounding Program City of Rancho Palos Verdes July, 2016 Appendix Appendix A - Chapter 12.2 - Underground Utility Districts Appendix B - Rule 20 - Replacement of Overhead with Underground Electric Facilities Appendix C - City of Rancho Palos Verdes, Underground Utilities Guidelines 16 B-17 Appendix A Rancho Palos Verdes Municipal Code Chapter 12.12 - UNDERGROUND UTILITY DISTRICTS Sections: 12.12.010 - Definitions. Whenever in this chapter the words or phrases defined in this section are used, they shall have the respective meanings assigned to them in the following definitions: A. "Commission" means the Public Utilities Commission of the state. B. "Person" means and includes individuals, firms, corporations, partnerships and their agents and employees. C. "Poles, overhead wires and associated overhead structures" means poles, towers, supports, wires, conductors, guys, stubs, platforms, crossarms, braces, transformers, insulators, cutouts, switches, communication circuits, appliances, attachments and appurtenances located above ground within a district and used or useful in supplying electric, communication or similar or associated service. D. "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 12.12.040. E. "Utility" includes all persons or entities supplying electric, communication or similar or associated service by means of electrical materials or devices. (Ord. 38 § 1 (part), 1974) 12.12.020 - Public hearing by council. 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 wire 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. 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. (Ord. 38 § 1 (part), 1974) 12.12.030 - Report by city engineer. Prior to holding such public hearing, the city engineer shall consult with 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. (Ord. 38 § I (part), 1974) 12.12.040 - Council may designate underground utility districts by resolution. Page 1 ISi Appendix A Rancho Palos Verdes Municipal Code 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. If the proceedings are initiated by the city council the resolution shall include a determination that the city or a public utility has voluntarily agreed to pay fifty percent of all costs of conversion excluding costs of users' connections to underground electric or communication facilities. (Ord. 135 § 7, 1980: Ord. 38 § 1 (part), 1974) 12.12.050 - 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 12.12.040, 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 said overhead facilities are required to be removed by such resolution, except as said 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 12.12.100, and for such reasonable time as is required to remove said facilities after said work has been performed, and except as otherwise provided in this chapter. (Ord. 38 § 1 (part), 1974) 12.12.060 - Exception—Emergency or unusual circumstances. Notwithstanding the provisions of this chapter, overhead facilities may be installed and maintained for a period, not to exceed ten days, without authority of the council in order to provide emergency service. The council may grant special permission on such terms as the council 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. (Ord. 38 § 1 (part), 1974) 12.12.070 - Other exceptions. In any resolution adopted pursuant to Section 10.12.040, the council may authorize any or all of the following exceptions: 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 volts; Page 2 Ins Appendix A Rancho Palos Verdes Municipal Code 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 furnishing 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. (Ord. 38 § 1 (part), 1974) 12.12.080 - Notice to property owners and utility companies. A. Within ten days after the effective date of a resolution adopted pursuant to Section 12.12.040, 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 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. B. Notification by the city clerk shall be made by mailing a copy of the resolution adopted pursuant to Section 12.12.040, together with a copy of this chapter, to affected property owners as such are shown on the last equalized assessment roll or as known to the clerk and to the affected utilities. (Ord. 38 § 1 (part), 1974) 12.12.090 - Responsibility of utility companies. If underground construction is necessary to provide utility service within a district created by any resolution adopted pursuant to Section 12.12.040, 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. (Ord. 38 § 1 (part), 1974) 12.12.100 - 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 this property between the facilities referred to in Section 12.12.090 and the termination facility on or within said 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 12.12.040, 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, or as known to the city engineer, to provide the required underground facilities within ten days after receipt of such notice. B. The notice to provide the required underground facilities may be 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 Page 3 Appendix A Rancho Palos Verdes Municipal Code 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, or as known to the city engineer, and when no address appears, to General Delivery, City of Rancho Palos Verdes. 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 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 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 the 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 said work is not completed within thirty 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 -day 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 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 said time shall not be less than ten days thereafter. E. The city engineer shall forthwith, upon the time for hearing such protests having been fixed, 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 provided in this section 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 said 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 the 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 seven percent per year. (Ord. 38 § 1 (part), 1974) 12.12.110 - Responsibility of city. The city shall remove at its own expense all city -owned equipment from all poles required to be removed under this chapter 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 12.12.040. (Ord. 38 § 1 (part), 1974) Page 4 B-21 Appendix A Rancho Palos Verdes Municipal Code 12.12.120 - Extension of time. In the event that any act required by this chapter or by a resolution adopted pursuant to Section 12.12.040 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 for a period equivalent to the time of such limitation. (Ord. 38 § 1 (part), 1974) Page 5 B-22 Southern California Edison - SCE Appendix B Rule 20 Guidelines Regulatory Information - SCE Distribution Manuals Underground Structures (UGS) Current as of January 29, 2016 Page 1 of 4 NE GUSH �1 -�01 Buscar Saved Items Loa Inl1 The UGS Manual provides guidance and standards pertaining to installing and working with underground structures f electrical facilities. The UGS Manual includes general information on concrete, steel, precast reinforced concrete structures and pull ropes, conduits, fittings and risers, handholes and pull boxes, manholes and vaults (poured and precast), semi -buried structures, frames, covers, and accessories. It is used by contractors, engineers, architects, an manufacturers engaged in the installation of underground electrical structures. All of the documents below are in PDF format. • UGS ■ UG Conversion Proiect Summary (Q2, 2013) ■ General Information ■ Conduits ■ Handholes and Pull Boxes ■ Manholes • Vaults • Subsurface/Semi-Buried Structures • Frames and Covers ■ Accessories ■ Miscellaneous Undergrounding Electric Lines and Equipment The California Public Utilities Commission's (CPUC) Rule 20 sets policies and procedures for the conversion of overt - power lines and other equipment to underground facilities, a process called "undergrounding." We support undergrounding because it provides substantial aesthetic benefits to local communities. Under Rule 20, undergrounding projects are financed by utility rate money, combined rate funds and local tax procee or private funds, depending on whether Rule 20A, Rule 20B or Rule 20C provisions apply. View Rule 20 tariff, as approved by the California Public Utilities Commission. About Rule 20A Rule 20A projects are paid for by all our customers and ratepayers, not just those who live in locations where facilities be undergrounded. City and county governments choose these projects, using a process that includes public participation. To qualify for full funding through utility rate proceeds, projects must produce a benefit to the general public, not just customers in the affected area, by satisfying one or more of these criteria: • The location has an unusually heavy concentration of overhead facilities. • The location is heavily traveled. • The location qualifies as an arterial or major collector road in a local government's general plan. • The overhead equipment must be located within or pass through a civic, recreational or scenic area. Using CPUC formulas, SCE allocates rate funds to communities for undergrounding based on previous allocations, 0 ratio of customers served by overhead facilities to all the customers in the community, and the fraction that customer! the community represent of all SCE customers. Local governments use these formulas to project allocations, which allows them to prioritize projects and develop pro schedules. Because funds are limited, local governments sometimes must wait and accumulate their allocations befo starting an undergrounding project. https://www.sce.com/wps/portal/home/regulatory/distribution-manuals/underground-struct... 3B4,236 Southern California Edison - SCE Page 2 of 4 About Rule 20B If an area is not eligible for Rule 20A or if local government cannot or chooses not to rely on the Rule 20A allocation process, Rule 20B allows rate funds to subsidize an undergrounding project. The subsidy includes an amount equal to the cost of an equivalent overhead electric system, usually about 20% of th total undergrounding project cost, plus the cost of removing the existing overhead system, which can be 5-20% of the total cost. The remaining cost is funded by local governments or through neighborhood special assessment districts. Rule 20B projects must be sited along public streets or roads or other locations mutually agreed to by the applicant organization and the utility. About Rule 20C Rule 20C enables property owners to pay for undergrounding electric lines and equipment if neither Rule 20A nor 201 applies. At a local government's request, SCE will meet with government officials and residents to provide status on any Rule project that has been approved. ■ SCE will meet with local officials every 30 days, if the local government requests it, to discuss Rule 20 project construction. • The Underground Planning Guide for local governments is being updated by utilities and the League of Californ Cities to include the how to, when, where and why's of undergrounding. • The utility will have a single point of contact to answer questions on Rule 20 for the general public. SCE's conta Talisa Lee at (714) 285-4336, or at TaIISa.Leo@sce.com. Local governments can contact their SCE region manager or Rule 20 project manager. A second phase of Rule 20 changes is currently under study. Topics include competitive bidding, incentive mechanis establishing a point after which no more overhead facilities will be constructed, and cost recovery for telecommunicat undergrounding projects. What is Rule 20? Rule 20 is a set of policies and procedures established by the California Public Utilities Commission to regulate the conversion of overhead electric equipment to underground facilities, a process called "undergrounding". Rule 20 determines the level of ratepayer funding for different undergrounding arrangements. See Rule 20A, Rule 20B, and j 20C above. How Can I Learn If My Neighborhood Is Scheduled For Undergrounding, Or Start A Rule 20C Project? You should contact your local city or county government offices to find out if your neighborhood is scheduled for a Ru 20 project or to learn the process used in your locality for Rule 20A and Rule 20B projects. To find out how to begin a Rule 20C project, contact Talisa Lee at (714) 285-4336. Will Power Outages Decrease After Undergrounding? Will Outages Be Longer Or Shorter? Our information is inconclusive. We believe, however, that in areas that experience frequent heavy winds, outages decrease when lines are undergrounded. In wetter areas, outages may tend to increase due to the effect of water seepage on underground equipment. The information we have, while inconclusive, seems to indicate that outages tend to be longer with underground facili simply because it is more difficult to find problems and replace equipment underground. Are Underground Facilities More Or Less Expensive than Overhead? Underground facilities are more expensive to install and maintain than overhead equipment. The cost of overhead equipment is about 20% of the cost of underground. Maintenance costs for underground facilities are also higher thar overhead. https://www.sce.com/wps/portal/home/regulatory/distribution-manuals/underground-struct... 822416 Southern California Edison - SCE Page 3 of 4 How Much Of My SCE Bill Goes To Undergrounding? The average cost of undergrounding per residential customer per month is in the neighborhood of a nickel. Does A Project Have To Meet All The Criteria To Qualify As A Rule 20A Project? No. Just one. Aren't Rule 20A Funds Really The Cities' Money? As with all its capital spending. SCE is required to pay for undergrounding projects up front with money it raises throu investor funds. The money is not collected from customers in rates ahead of time. Only after a project is completed c< SCE recover the money it spent to plan and construct a Rule 20 project. Do Allocations Not Represent Actual Funding? The allocations do not represent actual funding. They are a planning tool for local governments. They represent a qualified right to direct assign a portion of SCE's anticipated capital budget to qualified Rule 20A projects. Some of th language in the Rule 20 tariff seems to suggest that the allocations represent actual funds, but that is not the case, Did California's Energy Crisis Affect Rule 20? The energy crisis and the financial crisis it created for SCE delayed undergrounding plans for up to two years. SCE 'A not able to fund allocations during that time. The crisis also resulted in a delay in changes to Rule 20. Questions and Answers About New Rule 20 Regulations I Have Rule 20 Projects Under Construction. Do The New Rules Affect Me? No. The changes affect future projects, not those under way. What Are Arterial And Collector Roads? An arterial road is used or is intended to be used primarily for fast or heavy traffic. A collector road carries traffic from minor streets to the major system of arterial roads, including the principal entrance streets of a residential developme and streets for circulation within a residential area. Did The Latest Changes Include Modifications To The Allocation Or The Allocation Formula? No. The CPUC did not direct changes to allocation procedures. New Rule 20 Rules Allow Up To 5 Years Of "Mortgaging" - What Does That Mean? Mortgaging allows a local government to use up to five years of allocation amounts before they actually accumulate. Essentially, the local government may borrow five years of allocation to complete a Rule 20A project. The purpose of mortgaging is to help cities start and complete large projects faster. Can The Local Government Demand The Allocation? SCE makes every effort to accommodate local government requests to mortgage Rule 20A allocations. Utilities, upor request by a city or county, may disperse increased allocation, as long as they do not exceed five years' allocation. However, since funds come from the utilities, the utility has discretion of project participation, depending on resource available for Rule 20 allocations. What Has SCE Done To Change Coordination & Procedural Requirements Between It And Cities? SCE has taken the following measures to improve coordination and communications. We have: Increased availability of SCE personnel to respond to questions and concerns from customers and local government officials, including a single point of contact. https://wuv. sce. com/wps/portal/home/regulatory/distribution-manual s/underground-struct... 313 t-2(5 6 Southern California Edison - SCE Page 4 of 4 • Provided this information online to improve communications to customers about Rule 20 matters. ■ Begun revision of our Undergrounding Planning Guide for local government officials to make it more user -friend Who May I Contact For General Rule 20 Information? For information on Rule 20 in general, contact Talisa Lee at (714) 285-4336, or at Talisa.t_ee@sce.com. Share by Email Print L--- Siguenos en Facebook Twitter Linked In YouTube https://www.see.com/wps/portal/home/regulatory/distribution-manuals/underground-struct... 2 2616 Compartlr MogustaiJ1' 7 Tvilt-, Seguira'OD Enlaces Rapidos Secciones del Sitio Enlaces Corporativos Maneras de Pagar Su hogar About Us Mudanzas Para empresas Carreras Centro de apagones Atencion al Cliente Comunidad Contactenos Socios y proveedores Edison International Centro de apagones Adquisiciones de Energia Seguridad Sala de prensa AVISO DE PRIVACIDAD Regulador Mapa del sitio © 2016 Southern California Edison Share by Email Print L--- Siguenos en Facebook Twitter Linked In YouTube https://www.see.com/wps/portal/home/regulatory/distribution-manuals/underground-struct... 2 2616 Appendix C Guidelines TO Underground Utilities in Residential Neighborhoods City of Rancho Palos Verdes Public Works Department June 2005 APPROVED BY THE CITY COUNCIL On May 17, 2005 B-27 Table of Contents Item Introduction Page No. Procedures Step 1: 4 Building Neighborhood Consensus Step 2: 6 Project Design and Cost Estimate Step 3: District Formation—Engineer's Report and 8 Assessment Calculations Step 4: Assessment District and Bond Sale 10 Step 5: Construction of Underground Utility 11 Improvements Frequently Asked Questions Property Owner Petition 2 12 15 Introduction Few improvements enhance the appearance of a neighborhood as much as removing overhead utility wires and poles. Many times these facilities obscure spectacular ocean views, which are often times available throughout the Palos Verdes Peninsula. The process of removing these facilities, however, is costly and complex. Moreover, public funds are generally not available to fund these improvements. The City Council for the City of Rancho Palos Verdes has developed these guidelines to help residents understand and assist neighborhoods with the undergrounding process. This booklet will assist residents by answering the following questions: What is the process? How are improvements funded? What level of neighborhood support is needed? What are the typical costs per property? The full cost of utility undergrounding in residential neighborhoods is the financial responsibility of property owners. The state of California has a postponement program, which may allow some property owners to defer payment. The state of California has a postponement program, which may allow some property owners to defer payment. Information about the State of California Property Tax Postponement program can be found at the State Controller's website at http://www.sco.ca.gov/col/taxinfo/ptp/faq/index.shtml. 3 Procedures Step 1: Building Neighborhood Consensus 1.1 Provide City With Letter of Inquiry Neighborhood submits a Letter of Inquiry to the Public Works Department. The purpose of the letter is to notify the City of the neighborhood's intentions. The letter should identify the area contemplated for undergrounding, indicate to what degree the neighborhood has discussed undergrounding and it should give the name and contact information of a neighborhood representative. 1.2 Conduct a Neighborhood Meeting with City Coordinator and Utility Companies. When the City receives the letter a neighborhood meeting will be scheduled with representatives of the City and utility companies. At the neighborhood meeting details of the program will be discussed. 1.3 Formation of Neighborhood Committee Prior to or at the first meeting with City staff, the neighborhood should form a committee for undergrounding. The committee will be the primary contact with City staff and utility companies. The committee will help to establish boundaries of the district and will serve as the communication link between the City and the neighborhood. The Committee can be formed by HOA Board of Directors or any group of property owners interested in undergrounding. The preliminary boundary area of the undergrounding district neighborhood will be determined based upon the layout of the utility system, as well as neighborhood support for the project. 1.4 Neighborhood circulates petitions of Interest. Neighborhood circulates a petition within the boundaries of proposed district. Property owners interested in the project should sign the petition and attach to the petition a check, payable to the City of Rancho Palos Verdes, in the amount of $100 as a deposit towards the project. The deposit will be refundable up to the time that the City begins to spend funds for engineering services to design the project. 1.5 Neighborhood submits the following to the Public Works Department: Signed Petitions Before construction occurs, engineered plans must be prepared. The City Council will consider advancing funds for the engineering services to prepare the plans only if signed petitions are submitted by two- thirds, (66.6%) of property owners within the project boundary. When the neighborhood has fully circulated petitions in the neighborhood they are submitted to the Public Works Department for verification. Staff will verify that the names on the petitions match the current assessment roles. Plan to address concerns of property owners for whom the proiect would be a financial hardship. In most neighborhoods support for undergrounding project will not be unanimous. In some cases property owners will oppose the project because of financial reasons. Thus when the neighborhood submits petitions, they must also submit a written report indicating for each property that did not sign petition why they oppose the project. The report shall also include a plan to address the concerns of those property owners who are opposed to the project because it presents a financial hardship. An example of plans that have worked in other jurisdictions is for the entire neighborhood to agree to pay the cost for one or two property owners for whom the project would present a financial hardship. 1.6 City Council Meeting When petitions are verified the project will be scheduled for a City Council meeting to consider if the City will advance funds to pay for the engineering services to prepare the plan of construction. When deciding whether or not to advance funds for a particular project the City Council will consider many factors including: ➢ Project costs ➢ Availability of funding ➢ Level of neighborhood support ➢ How the neighborhood intends to address impacted property owners who have expressed a financial concern over the project Step 2 Project Design and Cost Estimates s B-31 2.1 Design and Cost Estimate Prepared: Southern California Edison, the other impacted utilities and a private engineering firm prepare engineering plans and an Estimate of Project Cost. Note the estimate of costs will be a total cost, not a property - by -property estimate of costs and will not include the cost of hook ups for individual properties. 2.2 Property Owner Information Meeting: Once project costs are known a neighborhood meeting is scheduled with City staff and utility companies officials. 2.3 Neighborhood circulates petitions of Interest. Neighborhood circulates a second petition within the boundaries of proposed district. The petition will now include an estimate of total project costs. Property owners interested in the project should sign the petition. 2.4 Signed Petitions are submitted to the Public Works Department. Before construction can occur an Engineer's Report of Assessment must be prepared. This report will review total project costs and assess costs to the various properties within the project boundary based upon the benefit that each property receives. The City will consider advancing funds if and only if petitions are signed by two- thirds (66.6%) of property owners within the project boundary. Signed petitions are submitted to the Public Works Department for verification. Staff will verify that the names on the petitions match the current assessment roles. 2.5 Council Meeting: When petitions are verified the project will be scheduled for a City Council meeting for consideration of City seed monies to prepare an engineer's report for the formation of the assessment district. In preparation for the City Council meeting, notices will be sent to all properties in the project area to provide project status and cost. The City Council will consider many factors including: Project costs 0 B-32 Availability of funding Level of neighborhood support How the neighborhood intends to address impacted property owners who have expressed a financial concern over the project B-33 Step 3: District Formation: Engineer's Report and The Calculation of Assessments are calculated 3.1 Engineer's Report: An Engineer's Report is the document that looks at costs and benefits and allocates project costs to the various properties within the project boundary. The report includes a review and restatement of total project costs determined by the design engineer; it lists and provides a map of the project area; it identifies the methodology used to determine benefit per property and apportions costs to each property based on the benefit that each property receives from the project. For example a property that benefits, in the form of an enhanced view due to the removal of a power pole and wires, will be assigned a higher benefit and therefore, have a higher assessment placed against it than a property that does not benefit in such a manner. The report will consider each and every property in this manner. The principal deliverable of the engineers report will be a property -by -property assessment of costs. 3.2 Property Owner Information Meetings: A neighborhood meeting will be scheduled during which the Engineer's Report will be discussed. 3.3 Council Meeting to consider a Resolution of Intent to Form and Assessment District: The City Council will review the Engineer's Report. If the report is approved, the City Council will adopt a Resolution of Intent, which sets a Public Hearing date, at which time the City Council will hear testimony and decide if the assessment district is formed. 3.4 Notice of Assessment and Ballots Mailed: The City Council can only form assessment districts if a simple majority of assessed properties (weighted by assessment amounts) agree to the assessment. To determine if this state mandated majority be met, ballots and Notices of Assessment are mailed 45 days prior to the Public Hearing. The results of the ballot election are tabulated at the Public Hearing. 3.5 City Council conducts Public Hearing: A Public Hearing is conducted to review ballot results and to receive comments or protests from the property owners and the results. If a simple majority of the weighted assessment value property owner's vote in favor of the project, the City Council may adopt the resolution forming the Assessment District. The term weighted assessment means that the vote of a property owner with a $20,000 assessment counts twice as much as the property owner with a $10,000 assessment. The ballot result is not the only factor that will be considered by the City Council. Other factors that may be considered include: ➢ How the neighborhood intends to address impacted property owners who have expressed a financial concern over the project. ➢ Level of neighborhood support -�O- City benefit from the project 0 B-35 Step 4: Assessment District and Bond Sale 4.1 Notice of Assessment: If the Assessment District is formed, a notice of assessment and financing options will be mailed to each property owner. A property owner may pay the assessment within the 30 -day cash collection period and receive a discount for bond financing costs. Property owners not paying within the 30 day period will have an assessment placed against their property in accordance with the Engineer's Report and will pay off the assessment in semi-annual payments with their property tax bills. 4.2 Bond Sale The income from the sale of the bonds is used to finance the cost of the utility undergrounding project. 10 Step 5: Construction of Underground Utility Improvements 5.1 Construction: The City will either enter into a contract with Southern California Edison to construct the improvements or advertise a contract for the construction. Bids are opened and a contract is awarded at a regular City Council meeting. Southern California Edison must complete portions of the work related to placing their facilities within conduits, however, much of the work may be advertised for competitive bids. When all properties are connected to the underground system, the utilities will convert to the underground system and utility wires and poles are removed. 11 B-37 Frequently Asked Questions What are the typical costs? The cost of undergrounding overhead utilities lines varies greatly from project to project; however, a good estimate is $ 40,000 — $ 60,000 per property. This amount is typically paid through an assessment. In addition to the construction within the street, the service connection to the individual homes must also be reconstructed. Under Assessment District law, the cost for these private connections is the responsibility of property owners. However, the law also provides that property owners can fill out a consent form requesting the City to construct the service as well and in such cases, the cost is included in the assessment. The cost to reconstruct individual service connections will vary greatly depending upon distance from the street to the connection point, as well as the type improvements that are impacted by the construction. A good estimate for a 40 -foot connection in lawn, or standard concrete or asphalt is $5,000. Will everyone pay the same amount? Generally no. The assessment process will determine the amount paid by various properties and will vary depending on the benefit the property receives from the project. For example properties with views greatly improved by the project will pay a higher assessment than a property with little or no improvement to view. How is the area of the district determined? The area of the district is determined by the neighborhood, in conjunction with Southern California Edison, to make sure the district boundaries works well with the electrical grid. Will all the wires and poles be removed? The undergrounding project will generally remove all wires and poles. There are some exceptions. Poles that support streetlights will not be removed. In addition, poles that support cellular communications will be removed if an alternate location can be found. How long should the process take? The length of the process will vary greatly from project to project depending on size, complexity, and availability of City funding and neighborhood support. It will take approximately 12 months to design the improvements 12 and six months to form the assessment district. A good estimate of time for the entire process is three - four years. Why can't the City pay for undergrounding utilities? Although the City is supportive of neighborhood undergrounding projects, adequate funding is not available. The undergrounding program requires the City to advance the cost for engineering services to design the plans and to prepare the Engineer's Report of Assessments. These costs, however, will be added to the cost of construction and included in assessments. Does the City receive funding for undergrounding from Southern California Edison? Yes, however, these funds are limited and are generally used for projects along arterial roadways. Why can't Edison pay for utility undergrounding? Unfortunately, undergrounding is expensive and there is no legal requirement for Edison to underground their facilities. What equipment will still be visible above ground? Will I get a chance to review proposed equipment locations before they are finalized? Transformers will be located in sub -surface vaults covered by typical manhole covers. Telephone systems also require above ground terminals. In addition many underground facilities will require air vents, which will be visible from the street. What is an Assessment District? An Assessment District is a financing tool used to fund the cost of a construction project over a period of time. With an assessment district, costs are apportioned to each parcel within the project boundary based upon the value of the special benefit conferred on that parcel. The amount each parcel pays is determined in the Engineer's Report of Assessment. How will I pay the assessment? Assessments can be paid one of two ways, either the amount of the assessment can be paid in cash or it can be financed in which case it will be paid over a time period typically 20 years as part of the property tax bill. Property owners wishing to pay the entire amount up front will save the cost of interest. 13 What is the term of the bond financing? Bonds are usually financed over 15 to 20 year terms. Can assessments be deferred for hardship cases? Individuals should consult with a tax advisor to determine if they qualify for the State of California Property Tax Postponement Program. If qualified, the utility undergrounding assessment may be deferred until the property is sold or the estate is settled. Information regarding the State of California Property Tax Postponement Program can be found at the California State Controller's Office website, http://www.sco.ca.gov/col/taxinfo/ptp/faq/index.shtml. 14 Property Owner Petition 15 Property Owner Petition TO: Honorable Mayor and Members of the Rancho Palos Verdes City Council PETITION OF INTEREST OF PROPERTY OWNERS TO UNDERGROUND UTILITIES WITHIN THE CITY OF RANCHO PALOS VERDES We, the undersigned, being owners of property within the area of a proposed assessment district to be established under the MUNICIPAL IMPROVEMENT ACT OF 1913, Division 12 (Sections 10000, et seq.) of the Streets and Highways Code of the State of California (the "Act"), do hereby petition the City Council of the City of Rancho Palos Verdes (the "City") to forthwith commence and carry through to completion under the provisions of said Act, all proceedings for the formation of an ASSESSMENT DISTRICT as hereinafter described and for the acquisition of the hereinafter mentioned improvements within the City of Rancho Palos Verdes, County of Los Angeles, State of California. The area within the City, which we hereby request the City Council to form as an ASSESSMENT DISTRICT, as hereinabove mentioned, is shown on a map attached hereto as Exhibit A entitled "MAP OF PROPOSED UNDERGROUNDING ASSESSMENT DISTRICT FOR THE NEIGHBORHOOD" The improvements, which we hereby request to be acquired for the benefit of the property within the above-mentioned proposed assessment district, are the conversion of existing overhead electrical and communications facilities to underground locations and the removal of poles. We understand: A. That the cost of the improvements will be assessed to the land, which benefits from the improvements including our land; B. That a report will be prepared on the project, including plans and specifications, a detailed cost estimate, and a division of the costs among the benefited parcels of land, and that a public hearing will be conducted on the report. C. That the cost of engineering, legal, and other incidental expenses will be included in the project cost; D. The estimated cost of the improvements to be financed from Assessment District for each parcel is $ 40,000 - $ 60,000. E. That each property owner may pay his assessment either in cash without interest or in installments with interest over a period of 15 to 20 years. 16 F. If the parcel's private property service connection to the utilities is not underground, then the property owner will be required to convert the service connection, at your own expense, after the utility undergrounding has been completed. The typical cost is $ 5,000. This expense may be added to the assessment. This petition is filed with you under and pursuant to the provisions of Section 2804 of the Streets and Highways Code of the State of California. The petition may be filed in counterpart or may be joined with other petition for a similar work. ASSESSOR'S PARCEL NO: STREET ADDRESS OF PROPERTY: OWNER'S SIGNATURE: OWNER'S NAME (PRINTED): DATE: MAILING ADDRESS (IF DIFFERENT FROM PROPERTY): Attach a check in the amount of $100 made payable to the City of Rancho Palos Verdes. The full cost of utility undergrounding in residential neighborhoods is the financial responsibility of property owners. The state of California has a postponement program, which may allow some property owners to defer payment. 17 Rule 20A Utility Undergrounding Program City of Rancho Palos Verdes July, 2016 Combined Distribution and Transmission Facilities It is estimated that there are approximately 8,100 linear feet of existing combined overhead distribution and transmission lines located adjacent to arterial and collector streets within the City that are eligible for undergrounding using Rule 20A funds. Based upon recent costs for undergrounding combined overhead distribution and transmission facilities in other SCE jurisdictions, the costs to underground all combined distribution and transmission facilities is estimated to be $ 22.7 million at an average of cost of $2,800/linear foot . This assumes that only the distribution facilities would be undergrounded, and that the transmission lines would remain overhead. Figure 2 shows the estimated costs by location. Figure 2 Summary of Existing Overhead Facilities and Estimated Undergrounding Costs 10 C-1 APPROX EST. AVG ESTIMATED ID STREET NAME BEGIN END TYPE LENGTH $/Ft COSTS ARTERIAL STREETS 1 CRENSHAW BOULEVARD CREST ROAD CRESTRIDGE RD 1800 Transmission N/A N/A 2 CRENSHAW BOULEVARD CRESTRIDGE RD CITY LIMIT 600 Transmission N/A N/A 3 CREST ROAD LA CROIX DR COUNTRY MEADOW 1500 Transmission N/A N/A 4 CREST ROAD COUNTRY MEADOW HIGHRIDGE ROAD 1550 Transmission N/A N/A 5 CREST ROAD HIGHRIDGE ROAD WHITLEY COLLINS DR 1,950 Transmission N/A N/A 6 CREST ROAD WHITLEY COLLINS DR CRENSHAW BLVD 1,500 Transmission N/A N/A 7 HAWTHORNE BLVD CITY LIMIT BLACKHORSE RD 4,900 Trans. & Distrib. $ 2,800 $ 13,720,000 8 HAWTHORNE BLVD BLACKHORSE RD SILVER SPUR RD 2,250 Trans. & Distrib. $ 2,800 $ 6,300,000 9 PALOS VERDES DR E MIRALESTE PLACE VIA CANADA 950 Trans. & Distrib. $ 2,800 $ 2,660,000 10 PALOS VERDES DR E VIA CANADA PICARDIE RD 300 Distribution $ 900 $ 270,000 11 PALOS VERDES DR E PICARDIE RD CORAL RIDGE RD 480 Distribution $ 900 $ 432,000 12 PALOS VERDES DR E CORAL RIDGE RD COLT RD 980 Distribution $ 900 $ 882,000 13 PALOS VERDES DR E COLT RD MARION DR 520 Distribution $ 900 $ 468,000 14 PALOS VERDES DR E MARION DR CLEVIS RD 630 Distribution $ 900 $ 567,000 15 PALOS VERDES DR E CLEVIS RD ROCKINGHORSE RD 1,200 Distribution $ 900 $ 1,080,000 16 PALOS VERDES DR E ROCKINGHORSE RD COACH RD 650 Distribution $ 900 $ 585,000 17 PALOS VERDES DR E COACH RD ROAN RD 1,200 Distribution $ 900 $ 1,080,000 18 PALOS VERDES DR E ROAN RD BRONCO DR 580 Distribution $ 900 $ 522,000 19 PALOS VERDES DR E BRONCO DR HEADLAND DR 450 Distribution $ 900 $ 405,000 20 PALOS VERDES DR E HEADLAND DR SUNNYSIDE RIDGE 1,950 Distribution $ 900 $ 1,755,000 21 PALOS VERDES DR E SUNNYSIDE RIDGE CITY LIMIT 4,130 Distribution $ 900 $ 3,717,000 22 1PALOS VERDES DRS ILA ROTONDA DR ICITY LIMIT 1 1,350 1 Distribution $ 900 $ 1,215,000 COLLECTOR STREETS 23 CRENSHAW BOULEVARD CREST ROAD VALLEY VIEW ROAD 680 Distribution $ 900 $ 612,000 24 RIDGEGATE DRIVE/GRANVIAALTAMIRA HAWTHORNE BLVD MONERO DRIVE 922 Distribution $ 900 $ 829,800 25 INDIAN PEAK ROAD CRENSHAW BLVD NORRIS CENTER DRIVE 1,300 Distribution $ 900 $ 1,170,000 26 MONTEMALAGA DR SILVER SPUR RD BASSWOOD AVE 1,369 Distribution $ 900 $ 1,232,100 27 MONTEMALAGA DR BASSWOOD AVE GRAYSLAKE ROAD 1,029 Distribution $ 900 $ 926,100 28 MONTEMALAGA DR GRAYSLAKE ROAD CITY LIMIT 1,735 Distribution $ 900 $ 1,561,500 29 SILVER SPUR RD BASSWOOD AVE ELKMONT DRIVE 1,440 Distribution $ 900 $ 1,296,000 30 SILVER SPUR RD ELKMONT DRIVE CITY LIMIT 480 Distribution $ 900 $ 432,000 Total $ 43,717,500 10 C-1 i 0 0 U o 0 0 o O o O bA 7 O O y r.+ � O O O 4., O Hw Q Q a � Y as b w >x Q b o o .v � 0 Q b 2 z > 0 z A N N i 0 o C — o N Q C = W J M o O NO Q o U rn m 21Da acn d 0 >worn 1 O > 07 O N Y QU04 X N 04 C? 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'�` `_ •FIs 3 qj Ln "m Ln Ln J)A IH IST Y a � - -O Q; i �� oiu3tuaf� Ugs { OL J _ A tat N CO Aug 11 2016 10;00 Douglas Butler page 2 Rancho Crest Homeowners Association c/o Douglas Butler, President 5417 Valley VLew Road Rancho Palos Verdes, California 90275-5092 home cell fax August 10, 2016 Via Fax 310 544 5292 Mike Gibson Senior Administrative Analyst Department of Public Works City of Rancho Palos Verdes 30940 Hawthorne Blvd Rancho Palos Verdes CA 90275 Re: City Council Agenda Aug 16, 2016 Utility Undergrounding Crenshaw Blvd Crest Road to Valley View Road Dear Mr. Gibson: --he Rancho Crest Homeowners Association (Valley View Road) supports the undergrounding of overhead utility facilities on Crenshaw Blvd. from Crest Road to Valley View Road under the Rule 20A program. Sincerely, Douglas Butler President, Rancho Crest Homeowners Association G-1 0