CC SR 20201020 G - Undergrounding Utilities Guidelines Update
RANCHO PALOS VERDES CITY COUNCIL MEETING DATE: 10/20/2020
AGENDA REPORT AGENDA HEADING: Consent Calendar
AGENDA TITLE:
Consideration and possible action to update the City’s Residential Guidelines to
Underground Utilities.
RECOMMENDED COUNCIL ACTION:
1) Approve amendments updating the City Council-adopted Residential Guidelines
to Underground Utilities.
FISCAL IMPACT: None
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: James O'Neill, Project Manager
REVIEWED BY: Ron Dragoo, PE, Principal Engineer
APPROVED BY: Ara Mihranian, AICP, City Manager
ATTACHED SUPPORTING DOCUMENTS:
A. Proposed updated Residential Guidelines to Underground Utilities (page A-1)
B. 2005 City Council-adopted Guidelines to Underground Utilities in Residential
Neighborhoods (page B-1)
C. May 17, 2005 staff report (page C-1)
BACKGROUND AND DISCUSSION:
Projects involving undergrounding overhead utilities typically generate robust public
interest especially with the recent wildfires throughout the state. However, the
associated expenses and complexity of issues often prevent such projects from being
undertaken.
As residents pay their utility bills monthly, a small portion of the bill is designated to help
finance overhead utility undergrounding projects. Accordingly, the City accrues financial
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credits annually with Southern California Edison. Collection of these funds began in
1967. Converting existing overhead utility lines (underground conversions) within cities
in California has been performed under California Public Utilities Commission (CPUC)
Electric Tariff Rule 20. This rule essentially has three parts:
• Rule 20A – Utility providers 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)
• Rule 20B – Property owners or developers pay 80% of the costs of utility
undergrounding projects. Projects usually involve larger developments or
neighborhoods that do not meet 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.
Rule 20D is limited to San Diego Gas & Electric Company projects in certain areas with
fire risk.
Existing residential neighborhoods are governed by Rule 20C and therefore property
owners are responsible for all costs associated with utility undergrounding. In May 2005,
the City Council established guidelines for residential neighborhoods to follow when an
area in the City desires to pursue undergrounding existing overhead utilities
(Attachment B).
As community interest in undergrounding has grown, and property owners have
contacted the City about the process of pursuing undergrounding projects for their
neighborhoods, Staff recognized the need to update the guidelines. Staff has updated
the guidelines to provide a clearer understanding of the process and to create forms to
help facilitate the process, and to correct errors in the 2005 version (Attachment A). The
updated guidelines also include a step-by-step flow chart.
Staff also recommends that property owners’ letters of support for a petition for the City
to advance funds for engineering be accompanied by checks of $500, compared to the
$100 requirement, which was established fifteen years ago. This will help demonstrate a
true financial commitment to the project and establish a better financial “seed” for hiring
an engineering firm to manage to undergrounding project.
The updated guidelines are being reviewed by the City Attorney’s office and any
recommended edits will be highlighted in late correspondence p rior to the City Council
meeting.
ADDITIONAL INFORMATION:
It should be noted that the CPUC is in the process of revising Rule 20, and is
considering a staff proposal to eliminate Rule 20A and 20D entirely and replace them
with a modified Rule 20B program or a new grant program. In April 2020, Staff
submitted comments on the proposed overhaul of the Rule 20 program, urging the
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CPUC against sunsetting the Rule 20A program and eliminating work credit trading, and
advocating for the inclusion of fire threat mitigation as a proposed eligible criterion for
Rule 20 funding. Staff continues to monitor the rulemaking process and will update the
City Council and the public on any future changes to the Rule 20 program.
CONCLUSION:
Staff recommends the City Council approve, via minute order, updated Residential
Guidelines to Undergrounding Utilities.
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Table of Contents
Item Page No.
Introduction ....................................................................................................................................1
Procedures
First Phase: Building Neighborhood Consensus.......................................................................4
Second Phase: Project Design and Cost Estimate.....................................................................6
Third Phase: District Formation – Engineer’s Report and Assessment Calculations ...............8
Fourth Phase: Assessment District and Bond Sale .................................................................10
Fifth Phase: Construction of Underground Utility Improvements .........................................11
Frequently Asked Questions .......................................................................................................12
Exhibits
Letter of Intent ............................................................................................................. Exhibit A
Petition (for the City to advance funding for engineering services) ............................ Exhibit B
Letter of Support (for the City to advance funds for engineering services) ................ Exhibit C
Explanation of Non-Support or Opposition ................................................................. Exhibit D
Petition (for the City to form an Assessment District) ................................................ Exhibit E
Letter of Support (for the City to form an Assessment District) ..................................Exhibit F
Explanation of Non-Support or Opposition ................................................................. Exhibit G
(Draft) Notice of Assessment....................................................................................... Exhibit H
Ballot (for formation of an Assessment District) .......................................................... Exhibit I
(Final) Notice of Assessment and Invoice .................................................................... Exhibit J
Consent for Construction of Home Service Connection.............................................. Exhibit K
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Introduction
These guidelines were created by the City to provide residents who are interested in
undergrounding overhead utility lines (power lines, telephone wires, television/internet cables and
associated poles and infrastructure) in their neighborhood, which is commonly referred to as
“undergrounding.”
Undergrounding is regulated by the California Public Utilities Commission (CPUC) under Electric
Tariff Rule 20, which allows cities and counties to identify areas for undergrounding projects.
Depending on the project characteristics and eligibility under pre-established criteria, a utility may
fund some, all, or none of the costs of an overhead conversion.
Rule 20 provides three levels, A, B, and C, of progressively diminishing ratepayer funding for the
projects (and a sub-program D which is specific to undergrounding in SDG&E’s Fire Threat
District). For the Rule 20 program, cities identify overhead lines that they wish to convert to
underground and in consultation with their investor owned utility determine if the conversion
project qualifies for any of the Rule 20 A, B, C or D programs.
For more information on the CPUC, and Tariff Rule 20, please visit www.cpuc.ca.gov,
Although few projects gather as much initial public support as undergrounding projects, when the
costs and complexity is better understood, support wains significantly. Although limited Rule 20
funding is available to the City for undergrounding projects along major arterial roadways, such
funding is NOT available for these projects in residential neighborhoods. Therefore, the cost of
such projects are the full financial responsibility of the affected property owners.
Undergrounding often positively addresses a number of neighborhood concerns, including
▪ Unsightly above-ground utilities
▪ View obstructions
▪ individual concerns regarding health and safety
However, the process of undergrounding in residential neighborhoods is costly and complex, and
presents a number of challenges and concerns, such as:
▪ Scale and scope of an undergrounding project
▪ Shared costs amongst the affected property owners
▪ Rights and responsibilities of affected property owners, including those who support or do
not support undergrounding
▪ Financing options including payment plans
▪ Utility connection between the new underground lines and the structures, including
associated costs and the physical impacts on landscaping and the connections to homes
▪ Potential financial hardship on one or more affected property owners
▪ Impacts to roadways, sidewalks and other infrastructure in the public right-of-way
Once an individual, small group or neighborhood endeavors to underground utilities in their
neighborhood, they must seek to establish an undergrounding district.
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The process described in these guidelines are based upon the best information available to the City
at the time, and is intended to be a step-by-step approach for residential neighborhoods considering
to pursue undergrounding district.
In forming an undergrounding district, there is no set requirement of neighborhood support (i.e.
what percentage of property owners need to support the project), but funding of the full project
costs must be provided by the neighborhood. Generally, if the petition to underground is supported
by at least two-thirds (66%) of property owners within the proposed district, it will be
recommended that the City advance funding.
In brief,
▪ At this time, the best estimates available to the City for undergrounding at the planning
stage is approximately $50,000 per property
▪ Costs to underground are borne by individual property owners. Although full payment by
property owners at the time of the project is ideal, financing project costs will likely be a
necessity for many property owners. The most likely sources of available financing would
be:
- Individually obtained financing (i.e. Home Equity Line of Credit, credit card or
personal loan)
- City financing assistance (resulting in liens on individual properties, which would
be repaid biennially with property taxes)
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First Phase: Neighborhood Interest and Organization
Step 1: Determine the level of interest within your neighborhood
Speak with your neighbors and discuss the contents of this Guideline brochure. It is
highly likely that most property owners and individuals will be in favor of relocating
overhead utilities (power lines, telephone and cable television) underground, but many
may be reluctant or unwilling to pay for such relocation.
Although interested neighbors can propose the boundaries of the district area for
undergrounding based on neighborhood support for the project, the district must also
be feasible to the affected utility companies and will likely be based on the layout of
the affected portion of the utilities infrastructure.
Step 2: Form a Neighborhood Committee and/or Select a Neighborhood Representative
Interested neighbors should form a committee to represent the neighborhood and
appoint a lead neighborhood representative to serve as the primary point of
communication with City staff, and representatives of Southern California Edison
(SCE) and other utilities (i.e. Cox Communications, Verizon, AT&T, etc.)
The committee can be formed by a Homeowner’s Association (HOA) Board of
Directors or any group of property owners interested in undergrounding. If the
proposed district is governed by (or partially governed by) a HOA, a letter of support
from the HOA’s Board of Directors is required.
Step 3: Provide City with Letter of Interest
The neighborhood committee and/or neighborhood representative submits a Letter of
Interest to the City (See Exhibit A as a sample letter). This letter is addressed to the
City Council and delivered to Public Works Department. The purpose of the letter is to
notify the City of the neighborhood’s interest and intention to form an undergrounding
assessment district.
The letter should identify the area contemplated for undergrounding (a map depicting
the area should be attached to the letter) and indicate to what degree the neighborhood
has discussed undergrounding. The letter should also give the name and contact
information of the neighborhood representative.
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Step 4: City will host a Community Meeting
Upon receipt of a Letter of Interest, which indicates significant outreach and a
significant level of support amongst property owners in the proposed district area, City
staff will begin the process of scheduling a community meeting to discuss the details
of the proposed project and the potential impacts on the properties, property owners
and occupants. As part of that process, the receipt of the Letter of Intent will be
reported in the City Manager’s Weekly Administrative Report.
The meeting will be scheduled so that representatives from the following are in
attendance:
▪ City Manager (or a designee)
▪ Public Works Staff
▪ Neighborhood representative and neighborhood committee members
▪ Representatives of impacted utility companies, including:
▪ Southern California Edison
▪ Cox Communications
▪ Verizon
▪ AT&T
Notice of the community meeting will be sent to all property owners within the
proposed district area at least 15 days in advance of the meeting.
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Second Phase: Petition the City to advance funding for Engineering
Step 5: Petition and Letters of Support / Explanations for examples of Lack of Support
After a Community Meeting is held, the neighborhood committee and/or neighborhood
representative may petition for the City to advance funding for engineering for the
project. (See Exhibit B for the form to be used)
The neighborhood committee and/or neighborhood representative are to reach out to
all of the owners of properties in the proposed district area, and obtain one of the
following for each property:
▪ Letter of Support signed by the property owner that is accompanied by a check
for $500 for each property, made payable to the City of Rancho Palos Verdes
(See Exhibit C for the form to be used), or
▪ Letter of Opposition, with signatures not required, explaining why the property
owner(s) oppose(s) the project or does not support it (See Exhibit D for the form
to be used)
Checks accompanying Letters of Support will be deposited by the City into a Trust
Deposit account and held until expenses begin to be incurred for engineering services
to design the project. Deposits will be refundable up until a purchase order is opened
by the City for engineering services, or until the project is canceled, whichever occurs
first. Refunds will not be subject to interest accrued in the Trust Deposit, nor potential
lost interest by the property owner(s).
It is unlikely that support for the undergrounding project will be unanimous, even if
only due to individual financial reasons. Thus, when the owner(s) of a property do not
support, or simply opposes, the proposed project, the neighborhood representative
and/or neighborhood committee member must document the reason for the opposition
or lack of support on the Letter of Opposition form. (See Exhibit D)
Step 6: City staff verification
Upon receipt of the Petition and supporting documents, City staff will begin to verify
that at least one Letter of Support or Letter of Opposition have been submitted for each
property within the proposed district area. Staff will also verify that the name on the
petitions match the current assessment roles.
Upon verification, the proposed project will be scheduled for consideration by the City
Council at one of its regularly scheduled meetings (typically the first or third Tuesday
of each month).
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Step 7: City Council consideration
As a Regular Business Agenda item, the City Council will consider the following
actions in response to the neighborhood’s petition:
• To support the neighborhood’s efforts to create an undergrounding district in
their neighborhood;
• Establish an assessment district for that purpose;
• Assume the role of Lead Agency for the project, or defer to one of the utility
companies (such as Southern California Edison);
• Advance funding for engineering services to prepare plans and specifications
for the project (Staff will only recommend to the City Council that the City
advance such funding if the Petition is accompanied by Letters of Support from
at least two-thirds (66.6%) of property owners within the proposed project
area);
• Alternatively, elect to not support the neighborhood’s efforts
• Take any other action deemed appropriate by the City Council
When considering the neighborhood’s petition, including 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 8: Funding of Engineering Costs
In the event that the City Council elects to advance funding for engineering, the Finance
Department will help determine the appropriate means and methods necessary for
providing necessary funds. This may require the issuing of bonds and assessment of
liens on proposed benefitting properties to ensure such funds are reimbursed to the City,
regardless if the undergrounding project is completed or not.
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Third Phase: Engineering and Apportionment of Project Costs
Step 9: Selection of Engineering firm
Like all other public projects impacting infrastructure facilities in public right-of-way,
Plans, Specifications and an Engineering Estimate of Construction Costs must be
prepared prior to obtaining public bids from potential contractors.
If the City Council elects to serve as the lead agency on the project, the City Council
will award a contract to an engineering firm to prepare the needed documents for the
project.
If the City Council elects to defer to one of the utility companies (i.e. Southern
California Edison) as the lead agency for the project, that utility company will assume
the responsibility for hiring an engineering firm for that purpose, or chose to prepare
the documents using internal staff.
All costs for the preparation of the documents shall be the financial responsibility of
the owners of the properties in the proposed assessment district, or as proposed in the
petition to address potential financial hardships of individual property owners.
Step 10: Preparing Plans, Specifications and an Engineering Estimate of Construction
Costs
It is important to note that the Engineering Estimate of Construction Costs will be an
estimate of the total construction cost for undergrounding the overhead utility facilities
in the public right-of-way areas only, and will not include the cost for individual
properties to connect to relocated facilities, nor define costs on a property-by-property
basis.
Step 11: Proposed apportionment of project costs
Once plans, specifications and the Engineering Estimate of Construction Costs have
been prepared, the Engineer will assess each property’s benefit from the project and
prepare a report that includes:
▪ A map of the project area
▪ The methodology used to determine the benefits to each property from the
project
▪ A recommended property-by-property apportioned cost of the project
That report will be provided to the neighborhood committee and/or neighborhood
representative to share with all of the impacted property owners, and a meeting will be
scheduled for the neighborhood to discuss the allocation of financial responsibility.
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Step 12: Neighborhood Meeting
A neighborhood meeting will be scheduled to discuss the recommended distribution of
project costs and either agree with the recommendation or propose an alternative
distribution. The meeting will be scheduled so that representatives from the following
are in attendance:
▪ City Manager (or a designee)
▪ Public Works Staff
▪ All owners of properties in the proposed Assessment District
▪ Representatives from impacted utility companies, which may include:
▪ Southern California Edison
▪ Cox Communications
▪ Verizon
▪ AT&T
Notice of the community meeting will be sent to all property owners within the
proposed district area at least 15 days in advance of the meeting.
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Fourth Phase: Petition to Establish an Assessment District
Step 13: Petition to establish an Assessment District
After the Neighborhood Meeting is held, the neighborhood committee and/or
neighborhood representative must submit a Petition to Establish an Assessment District
(See Exhibit E for the form to be used) to the City, accompanied by the following:
▪ Letters of Support (and accompanying checks) for each property for which the
owner(s) are in support of the project
▪ Letters of Opposition for each property for which the owner(s) do not support,
or oppose, the project
▪ A proposal to address the financial share of property owners for which the
project would pose a financial hardship
(A possible proposal would be for the neighborhood to agree to collectively
share the financial responsibility of property owners for which the project
would present a financial hardship)
The neighborhood committee and/or neighborhood representative must submit a
Petition to Establish an Assessment District (See Exhibit E for the form to be used) to
the City, accompanied by the following:
Step 14: Council Meeting to consider a Resolution of Intent to Form an Assessment District
As a Regular Business Agenda item, the City Council will consider the Engineer’s
report (see Step 11). If the report is accepted, the City Council will adopt a Resolution
of Intent, which sets a Public Hearing date (at least 45 days later), at which time the
City Council will hear testimony and decide whether or not to form an Assessment
District.
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Fifth Phase: Voting and Public Hearing to establish an
Assessment District
Step 15: Notice of Assessment and Ballots mailed
The City Council can only form an Assessment District if a simple majority of assessed
properties (weighted by assessment amounts) agree to the assessment.
To determine if this state mandated majority is 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.
If a simple majority of assessed properties (weighted by assessment amounts) does
NOT support the formation of the proposed Assessment District, then the Assessment
District will not be formed. In such an event, the project will not move forward and
property owners will be required to reimburse the City for the Engineering costs
incurred, in accordance with the neighborhood’s petition to advance funding.
Step 16: City Council conducts a Public Hearing
A Public Hearing is conducted by the City Council 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 (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) value property owner’s vote
in favor of the project, the City Council may adopt the resolution forming the
Assessment District.
The ballot result is not the only factor that will be considered by the City Council. Other
factors that may be considered by the City Council include:
▪ How the neighborhood intends to address impacted property owners who have
expressed a financial concern over the project
▪ Level of neighborhood support
▪ City benefit from the project
Step 17: 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.
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Sixth Phase: Construction of Underground Utility Improvements
Step 18: Construction
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.
The City will either enter into a contract with Southern California Edison to construct
the improvements or advertise a contract for the construction. If the latter approach is
utilized, bids will be sought in accordance with the City’s public project policies and
procedures.
When all properties are connected to the underground system, the utilities will convert
to the underground system and utility wires and poles are removed.
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1. What are the typical costs?
The cost of undergrounding overhead utilities lines varies greatly from project to project;
however, it is estimated to cost $50,000 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 construct the service as well
and in such cases, the cost is included in the assessment and paid by the property owner over
time.
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.
2. Will everyone pay the same amount?
Generally, no. The assessment process will determine the amount paid by various property
owners 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.
3. How is the area of the assessment district determined?
The area of the assessment district is determined by the neighborhood, in conjunction with
Southern California Edison, to make sure the district boundaries works well with the
electrical grid.
4. 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 (wireless) communications may only be removed if an alternate location can
be found.
5. 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 and six months to form the Assessment
District. A good estimate of time for the entire process is three – four years.
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6. 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 of
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 to be paid by the property owners within the assessment district.
7. Does the City receive funding for undergrounding from Southern California Edison?
Yes, the City is allocated a certain amount of “work credits” annually for undergrounding,
however, these credits must be accumulated over many years to funds undergrounding
projects, and those projects are generally along arterial roadways.
Rule 20A projects are constructed in areas of communities that are used most often by the
general public. Because ratepayers contribute the bulk of the costs of Rule 20A programs
through utility rates, the projects must be in the public interest by meeting one or more of the
following public interest criteria:
▪ Eliminate an unusually heavy concentration of overhead lines;
▪ Involve a street or road with a high volume of public traffic
▪ Benefit a civic or recreation area or area of unusual scenic interest;
▪ Be listed as an arterial street or major collector as defined in the Governor’s Office
of Planning and Research (OPR) Guidelines
8. Why can’t Edison pay for utility undergrounding?
Unfortunately, undergrounding is expensive and there is no legal requirement for Edison to
underground their facilities.
9. 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.
10. 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.
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11. How will I pay for 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.
12. What is the term of bond financing?
Bonds are usually financed over 15 to 20 year terms.
13. 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:
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First Phase
•Determine neighbor interest
•Form a committee and select representative
•Provide City with Letter of Intent
•City will host a Community Meeting with neighborhood representative(s)
and Utility Company representatives
Second
Phase
•Petition (and accompanying Letters of Support) the City to advance funding
for Engineering
•City staff verification
•City Council consideration
•(potential) Funding of Engineering costs
Third Phase
•Selection of Engineering firm
•Preparing Plans, Specifications and an Engineering Estimate of Construction
Costs
•Proposed apportionment of project costs
•Neighborhood Meeting to discuss Engineering and apportionment of costs
Fourth
Phase
•Petition to establish an Assessment District (and accompanying Letters of
Support)
•City Council consideration of a Resolution of Intent to form an Assessment
District and set a Public Hearing date
Fifth Phase
•Voting
•City Council conducts a Public Hearing to consider the formation of an
Assessment District
•Notices of Assessment (identifying financing options)
Sixth Phase
•Construction
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Letter of Interest
to underground utilities within the City of Rancho Palos Verdes
To: Honorable Mayor and members of the Rancho Palos Verdes City Council
c/o Director of Public Works Department
30940 Hawthorne Boulevard
Rancho Palos Verdes, California 90275-5391
I/We, as owner(s) of property(ies) within the _______________________________ neighborhood
(depicted on the attached map) of the City of Rancho Palos Verdes (“City”) with existing overhead
electrical and communication utility lines and poles, wish to pursue a project to have those utilities
relocated underground in my/our neighborhood.
As such, I/we have reviewed the latest version of the City’s “Guidelines to Underground Utilities
in Residential Neighborhoods and discussed its contents with owners of _[#]_ of the _[#]_
properties in the proposed area of the project. Of the owners that I/we have spoken to, _[#]_ have
expressed their willingness to support a project for undergrounding the overhead utility facilities,
including indicating that they are willing to bear their fair portion of the financial responsibility
for associated project costs.
Therefore, I/we hereby request that the City schedule a meeting with owners of properties from
the area depicted on the attached map and representatives of the City and companies owning
overhead utility facilities in our neighborhood.
Respectfully,
(signature) (signature)
(full name, printed) (full name, printed)
Owner of the property at: Owner of the property at:
(only address number and street name are needed) (only address number and street name are needed)
(signature) (signature)
(full name, printed) (full name, printed)
Owner of the property at: Owner of the property at:
(only address number and street name are needed) (only address number and street name are needed)
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Petition of the City of Rancho Palos Verdes
to advance funding for engineering services
for a proposed undergrounding project
To: Honorable Mayor and members of the Rancho Palos Verdes City Council
c/o Director of Public Works Department
30940 Hawthorne Boulevard
Rancho Palos Verdes, California 90275-5391
To: Honorable Mayor and members of the Rancho Palos Verdes City Council
I/We, being owners of property within an area of the City that we wish to pursue residential utility
undergrounding, hereby request the City Council advance funding for engineering services to:
▪ determine the full scope of the proposed undergrounding;
▪ develop plans, specifications, and an engineering estimate of construction costs
▪ Assess each property’s benefit from the project
▪ Prepare a report that includes:
▪ A map of the project area
▪ The methodology used to determine the benefits to each property from the project
▪ A recommended property-by-property apportioned cost of the project
In support of this petition, Letters of Support from the owner(s) of each property that supports this
petition is attached, and an accompanying check for $500 has been provided to the City as a down
payment and sign of our financial commitment to this effort.
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 initial estimated cost of improvements for each property $50,000;
E. That each property owner may pay their assessment either in cash without interest, or in
installments with interest over a period of 15-20 years;
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 their owner
expense, after the utility undergounding has been completed. The typical cost is $5,000.
This expense may be added to the assessment.
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Petition of the City of Rancho Palos Verdes
to advance funding for engineering services
for a proposed undergrounding project
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 petitions for similar work.
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Letter of Support
of the ____________________ Neighborhood’s Petition
to underground utilities within the City of Rancho Palos Verdes
To: Honorable Mayor and members of the Rancho Palos Verdes City Council
c/o Director of Public Works Department
30940 Hawthorne Boulevard
Rancho Palos Verdes, California 90275-5391
I/We, the undersigned, being owners of the property at __________________________________
hereby support my neighborhood’s efforts to underground utilities within the City of Rancho Palos
Verdes, and the Petition for the City to advance funds for engineering services to develop plans,
specifications and an engineering estimate of construction cost for the project.
In signing this Letter of Support, I/we attest to having read the City’s Guidelines to
Undergrounding Utilities in Residential Neighborhoods, and understand that:
1. the apportioned share, as determined by the City Council, of the project costs will be
assessed to the land which benefits from the improvements, including my/our land, unless
that share is paid at the conclusion of the project;
2. the apportioned share for my property must be paid, even if the project is not completed
and the undergrounding of utilities is not performed (i.e. there is insufficient support for
construction of the project after engineering work has begun);
3. A Public Hearing will be conducted by the City Council to establish an Assessment
District after engineering services work is completed;
4. The costs of engineering, legal and other incidental expenses will be included in the project
cost;
5. The estimated cost of improvements to be financed from the Assessment District for each
parcel is $40,000 – 60,000;
6. Each property owner may pay their assessment in cash without interest, or in installments
with interest over a period of 15 – 20 years;
7. If the parcel’s private property service connection either projects costsplans, specifications
and costs that all costs associated with the project are the financial responsibility of the
owners of the properties directly benefitting from the project, not the City’s, and that an
appropriate allocation of the costs will be determined including me/us, as unless
alternative arrand that payment of my/our apportioned share of the project costs will either
be paid at the conclusion of the project or be assessed to the property and paid biennially
with the property taxes.
The improvements, which we hereby request to be acquired for the benefit of the property within
the above-mentions 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 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;
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Letter of Support
of the ____________________ Neighborhood’s Petition
to underground utilities within the City of Rancho Palos Verdes
B. That each property owner may pay their assessment either in cash without interest, or in
installments with interest over a period of 15-20 years;
C. 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 their owner
expense, after the utility undergounding has been completed. The typical cost is $5,000.
This expense may be added to the assessment.
Respectfully,
(signature) (signature)
(full name, printed) (full name, printed)
(email address) (email address)
(home phone number) (home phone number)
(cell/mobile phone number) (cell/mobile phone number)
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Explanation of Non-Support / Letter of Opposition
to underground utilities within the City of Rancho Palos Verdes
To: Honorable Mayor and members of the Rancho Palos Verdes City Council
c/o Director of Public Works Department
30940 Hawthorne Boulevard
Rancho Palos Verdes, California 90275-5391
I/We, the undersigned, being owners of the property at __________ [property address]_________
DO NOT SUPPORT the efforts to underground utilities within my neighborhood in the City of
Rancho Palos Verdes for the following reasons: (check all that apply)
☐ Personal expenses would be a financial burden
☐ Do not wish to incur personal expenses related to the project
☐ Do not believe that property owners should pay for the project
☐ The overhead utilities do not bother me and/or I like them
☐ Do not want to disrupt landscape and/or hardscape on my property to underground utility
connections to my home that are currently overhead
☐ Other (please specify)
☐ Do not wish to specify
Property Owner(s) (please print name) Property Owner Signature(s)
Property Address Mailing Address (if different from the Property Address)
Alternatively, if the property owner does not wish to complete this form, a representative of the
Neighborhood Committee or the Neighborhood Representative can complete the form to document
a verbal conversation with the property owner, as long as it is so noted.
Committee Representative (please print name) Committee Representative Signature
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Petition to the City of Rancho Palos Verdes
to form an Assessment District
To: Honorable Mayor and members of the Rancho Palos Verdes City Council
I/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 the map attached hereto as Exhibit A entitled
“Map of Proposed Undergounding Assessment District for the ___________ neighborhood.”
The improvements, which we hereby request to be acquired for the benefit of the property within
the above-mentions proposed assessment district, are the conversion of existing overhead electrical
and communications facilities to underground locations and the removal of poles.
We understand:
G. That the cost of the improvements will be assessed to the land which benefits from the
improvements including our land;
H. 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;
I. That the cost of engineering, legal, and other incidental expenses will be included in the
project cost;
J. The estimated cost of improvements to be financed from Assessment District for each
parcel is $40,000 - $60,000;
K. That each property owner may pay their assessment either in cash without interest, or in
installments with interest over a period of 15-20 years;
L. 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 their owner
expense, after the utility undergounding 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 petitions for similar work.
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Letter of Support
of the ____________________ Neighborhood’s Petition
to form an Assessment District
Petition of Interest
to underground utilities within the City of Rancho Palos Verdes
To: Honorable Mayor and members of the Rancho Palos Verdes City Council
I/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 the map attached hereto as Exhibit A entitled
“Map of Proposed Undergounding Assessment District for the ___________ neighborhood.”
The improvements, which we hereby request to be acquired for the benefit of the property within
the above-mentions 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 improvements to be financed from Assessment District for each
parcel is $40,000 - $60,000;
E. That each property owner may pay their assessment either in cash without interest, or in
installments with interest over a period of 15-20 years;
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 their owner
expense, after the utility undergounding has been completed. The typical cost is $5,000.
This expense may be added to the assessment.
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Letter of Support
of the ____________________ Neighborhood’s Petition
to form an Assessment District
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 petitions for similar work.
Property Information
Property Address Mailing Address (if different from the Property Address)
Assessor Parcel Number (APN):
Property Owner(s) (please print name) Property Owner Signature(s)
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Explanation of Non-Support / Letter of Opposition
to underground utilities within the City of Rancho Palos Verdes
To: Honorable Mayor and members of the Rancho Palos Verdes City Council
c/o Director of Public Works Department
30940 Hawthorne Boulevard
Rancho Palos Verdes, California 90275-5391
I/We, the undersigned, being owners of the property at __________ [property address]_________
DO NOT SUPPORT the efforts to underground utilities within my neighborhood in the City of
Rancho Palos Verdes for the following reasons: (check all that apply)
☐ Personal expenses would be a financial burden
☐ Do not wish to incur personal expenses related to the project
☐ Do not believe that property owners should pay for the project
☐ The overhead utilities do not bother me and/or I like them
☐ Do not want to disrupt landscape and/or hardscape on my property to underground utility
connections to my home that are currently overhead
☐ Other (please specify)
☐ Do not wish to specify
Property Owner(s) (please print name) Property Owner Signature(s)
Property Address Mailing Address (if different from the Property Address)
Alternatively, if the property owner does not wish to complete this form, a representative of the
Neighborhood Committee or the Neighborhood Representative can complete the form to document
a verbal conversation with the property owner, as long as it is so noted.
Committee Representative (please print name) Committee Representative Signature
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To: [Property Owner]
[Mailing Address]
[City], [State] [Zip Code]
Re: Assessment of liability to the property at __________________
(Assessor Parcel Number (APN): _______________)
To the owners of the above referenced property,
An assessment is being levied against the above referenced property as part of the Assessment
District 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”) on ____ for
improvements within the City of Rancho Palos Verdes, County of Los Angeles, State of California.
The liability assigned to the above referenced property is $ .00, and is your financial
responsibility.
If you have any questions regarding this assessment, please contact:
City of Rancho Palos Verdes
Department of Public Works
30940 Hawthorne Boulevard
Rancho Palos Verdes, California 90275
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To: Honorable Mayor and members of the Rancho Palos Verdes City Council
c/o Director of Public Works Department
30940 Hawthorne Boulevard
Rancho Palos Verdes, California 90275-5391
I/We, the undersigned, being owners of the property at __________ [property address]_________
have received a Draft Notice of Assessment for my/our property and
☐ Support / Vote FOR
☐ Opposed / Vote AGAINST
The formation of an Assessment District (as described and defined in the City’s Guidelines to
Underground Utilities in Residential Neighborhoods)
Please provide comments to explain your vote, if you wish. (Not required)
Property Owner(s) (please print name) Property Owner Signature(s)
Property Address Mailing Address (if different from the Property Address)
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To: [Property Owner]
[Mailing Address]
[City], [State] [Zip Code]
Re: Assessment of liability to the property at __________________
(Assessor Parcel Number (APN): _______________)
To the owners of the above referenced property,
An assessment is being levied against the above referenced property as part of the Assessment
District 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”) on ____ for
improvements within the City of Rancho Palos Verdes, County of Los Angeles, State of California.
The liability assigned to the above referenced property is $ .00, and is your financial
responsibility.
If you have any questions regarding this assessment, please contact:
City of Rancho Palos Verdes
Department of Public Works
30940 Hawthorne Boulevard
Rancho Palos Verdes, California 90275
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To: Honorable Mayor and members of the Rancho Palos Verdes City Council
c/o Director of Public Works Department
30940 Hawthorne Boulevard
Rancho Palos Verdes, California 90275-5391
I/We, the undersigned, being owners of the property at __________ [property address]_________
hereby acknowledge that a new service connection to our home will be necessary when overhead
utilities are relocated underground in our neighborhood, and that costs associated with establishing
this new connection is my/our financial responsibility.
I/We hereby request that the City of Rancho Palos Verdes, Southern California Edison and/or third
party contractors hired, construct the necessary service connections as part of the undergrounding
project.
I/We acknowledge that such construction may require trenching from the street to the main
structure of the home, and will likely damage or otherwise disturb existing vegetation.
I/We further acknowledge that the connection will be constructed in the most cost effective way
possible, and is likely to not be the most aesthetically pleasing manner possible. This includes,
but is not limited to replacing decorative vegetation such as flowers and bushes, hardscape such as
rock or mulch, or replacement of driveways or sidewalks that are cut for required trenching.
Property Information
Property Address Mailing Address (if different from the Property Address)
Assessor Parcel Number (APN):
Property Owner(s) (please print name) Property Owner Signature(s)
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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
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Table of Contents
Item Page No.
Introduction 3
Procedures
Step 1:
Building Neighborhood Consensus
4
Step 2:
Project Design and Cost Estimate
6
Step 3:
District Formation—Engineer’s Report and
Assessment Calculations
8
Step 4:
Assessment District and Bond Sale 10
Step 5:
Construction of Underground Utility
Improvements
11
Frequently Asked Questions 12
Property Owner Petition 15
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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.
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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.
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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
project 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:
¾ Project costs
¾ Availability of funding
¾ Level of neighborhood support
¾ 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
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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
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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
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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.
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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:
¾ How the neighborhood intends to address impacted property
owners who have expressed a financial concern over the project.
¾ Level of neighborhood support
¾ City benefit from the project
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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.
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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.
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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
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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.
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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.
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Property Owner
Petition
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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 proposedassessment district to be established under the MUNICIPAL IMPROVEMENTACT OF 1913, Division 12 (Sections 10000, et seq.) of the Streets andHighways Code of the State of California (the "Act"), do hereby petition theCity Council of the City of Rancho Palos Verdes (the "City") to forthwithcommence and carry through to completion under the provisions of said Act,all proceedings for the formation of an ASSESSMENT DISTRICT ashereinafter described and for the acquisition of the hereinafter mentionedimprovements within the City of Rancho Palos Verdes, County of LosAngeles, 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.
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17
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 petitionfor 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.
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TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: DIRECTOR OF PUBLIC WORKS
DATE: MAY 17, 2005
SUBJECT: RESIDENTIAL UNDERGROUNDING PROGRAM
RECOMMENDATION
Adopt guidelines for undergrounding utilities in residential neighborhoods.
BACKGROUND
In an effort to encourage the undergrounding of utility lines the City Council requested
staff to prepare guidelines to assist property owners. This matter has appeared on the
City Council’s agenda on several occasions to discuss elements of the program. On
December 16, 2003 the City Council directed staff to prepare a program with the
following characteristics:
1. Seed monies will be provided by the City to fund the design of the improvements,
and the formation of the assessment district.
2. Each petition process must be approved by two-thirds of property owners in the
project.
3. Property owners signing the initial petition shall submit a check in the amount of
$100. These funds will be used to design the improvements.
4. When the project first appears before the City Council, the neighborhood must
present a written plan to address concerns of property owners who express
financial hardship as their reason for opposing the project.
On April 20, 2004 staff presented revised guidelines at which time the City Cou ncil
further directed staff to:
1. Investigate the status of the resolution adopted by the League of California Cities
regarding undergrounding.
2. Revise guidelines to include discussions that the improvements can be
constructed by Southern California Edison or with a contractor obtained through
the competitive bidding process.
3. Provide the guidelines to the Council of Homeowners Association for feedback.
4. Bring back the final guidelines for review.
DISCUSSION
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The attached draft guidelines include the policy issues directed by the City Council as
well as the feedback received from the Council of Homeowners Associations.
Attached is a copy of the resolution adopted by the League of California Cities regarding
undergrounding.
At this time three neighborhoods are considering undergrounding; Seaview, Grandview,
and Coolheights.
CONCLUSION
Adopting the staff recommendation will approve guidelines to underground utilities in
residential neighborhoods, and the formation of an undergrounding assessment district.
FISCAL IMPACT
Staff could not identify a fiscal impact to the recommended action
Submitted by,
Dean Allison,
Director of Public Works
Reviewed by,
Les Evans, City Manager
Attachments:
Draft Guidelines
Resolution Adopted by the League of California C ities
DRAFT
Guidelines TO Underground Utilities in Residential Neighborhoods
City of Rancho Palos Verdes
Public Works Department
June 2005
Table of Contents
Item Page No.
Introduction
3
Procedures
Step 1: 4
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Building Neighborhood Consensus
Step 2:
Project Design and Cost Estimate
6
Step 3:
District Formation—Engineer’s Report and Assessment
Calculations
8
Step 4:
Assessment District and Bond Sale
10
Step 5:
Construction of Underground Utility Improvements
11
Frequently Asked Questions 12
Property Owner Petition 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.
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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.
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:
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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 project 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 wh y 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
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.
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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 t hat 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
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
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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.
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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
City benefit from the project
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 wil l
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.
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 th e 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 fo r
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.
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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 $20,000 – $25,000 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 a s 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 amoun t 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 vie w.
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 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 undergrou nding 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 t he cost of construction and
included in assessments.
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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 amou nt 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.
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.
Property Owner Petition
TO: Honorable Mayor and Members of the Rancho Palos Verdes City Council
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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 acquisition cost of the improvements to be financed from Assessment
District for each parcel is $20,000 - $25,000.
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.
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.
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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.
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