Item No.
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: OFFICE OF THE CITY MANAGER
BY: MATTHEW BAUMGARDNER, DIRECTOR OF PUBLIC WORKS/CITY
ENGINEER
DATE: JUNE 11, 2024
SUBJECT: DISCUSSION REGARDING THE DEVELOPMENT OF A UTILITY UNDERGROUNDING PLAN AND PROPOSED EXPEDITURE OF RULE 20A
FUNDING TO UNDERGROUND EXISTING UTILITY LINES
EXECUTIVE SUMMARY
The City Council will discuss the development of a utility undergrounding plan for the City.
In order to do this, staff has provided background information on past undergrounding efforts in the City dating back to 1968 that has focused on developing underground utility districts on arterial road segments through major corridors in the City. Additional analysis is provided that looks at completing the remaining arterial road segments throughout the city as the focus of a utility undergrounding plan. This aligns with past undergrounding goals that focused on enhancing public safety, aesthetics, and infrastructure reliability along the City’s major corridors. Staff seeks direction from the City Council on whether to focus on just arterial road segments or expanding into residential areas. Staff is also seeking direction on defining a near-term utility undergrounding project using available CPUC Rule 20A funds, which must be assigned to a project by June 2025.
RECOMMENDATION
That the City Council:
1. Discuss the development of a utility undergrounding plan and direct staff to include arterial road segments only in the initial plan; and
2. Provide direction on one of four potential near-term utility undergrounding projects using the available balance of CPUC Rule 20A work credit funds.
BACKGROUND
As part of the annual Strategic Goals adopted for Fiscal Year 2023-2024, the City Council directed staff to create a plan on how to proceed with undergrounding utilities throughout the City over the next few decades. Before developing the plan, it is helpful to understand how utilities are distributed throughout the City. Utilities are carried on joint overhead utility poles owned by Southern California Edison (SCE). These poles typically carry non- electric utility lines that offer telephone, cable, and fiberoptic communications, as well as their electrical lines that are carried higher up on the poles. SCE provides space on the
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poles to the communication utilities through lease agreements. SCE also owns dedicated utility towers that carry higher voltage transmission lines. These towers bring power into the City from a regional network of power substations. Once the power comes into the City, it is typically distributed throughout the community through the local network of joint utility power poles on lower voltage distribution lines. In the residential neighborhoods, the joint poles typically carry just the distribution lines. However, the arterial roads can carry both types of lines on joint poles and transmission towers.
CPUC Rule 20
The California Public Utility Commission (CPUC) oversees the electrical utilities throughout the State. It establishes the polices and procedures that govern the process for converting overhead power lines and equipment to underground facilities through the Electric Tariff Rule 20.
Under this program, there are guidelines that allocate work credits to cities that can be used to subsidize the cost of undergrounding utilities along arterial roads where there is a desire to eliminate heavy concentrations of overhead lines. These guidelines are broken down into three subcategories known as CPUC Rule 20A, Rule 20B, and Rule 20C.
Under Rule 20A, cities can petition the electric utility to cover the full cost of the lines.
Under Rule 20B, cities can petition the electric utility to cover a portion, typically 20 percent of the cost. Under Rule 20C, the costs to underground the utilities are completely covered by the City.
CPUC Rules 20A and 20B are primarily aimed at converting overhead electrical distribution facilities to underground lines to enhance public safety, reliability, and aesthetics in areas with significant public benefit. The criteria include the following:
• Projects are located in areas with high traffic, such as major streets, scenic highways, civic centers, and areas with a high concentration of public benefit. • These projects are often initiated by local government agencies or utility companies and are usually funded through a combination of utility rates and government funds.
The conversion projects must meet specific criteria regarding public interest and benefit, such as improving safety, reliability, or visual aesthetics in highly visible or congested areas.
CPUC Rule 20C typically applies to undergrounding in residential areas. In this case, the Rule 20A and 20B criteria are not met because they are not seen by the CPUC as highly visible or congested.
History of Utility Undergrounding in Downey
Over the years, the City of Downey has a successful track record of completing utility undergrounding projects within its arterial street segments and corridors. This effort has significantly enhanced public safety, aesthetics, and infrastructure reliability. Several key resolutions have been passed by the City Council in the past to establish utility undergrounding districts, replacing overhead utility lines with underground systems. The subject projects involve installation of underground infrastructure including trenching,
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backfilling and associated labor as necessary to underground the overhead electrical, telephone, cable, and telecommunications utilities. These projects take several years to complete because they must be done in two phases. The first phase involves creating the utility trench along the City’s Right-of-Way and burying conduit, ductwork, and vaults for future placement of all of the overhead utility lines and equipment carried on the joint poles. The second phase involves the actual transfer of all the equipment from the poles into the conduit, ductwork, and vaults that were established during the first phase and the removal of the poles. The telephone, cable, and fiberoptic utilities must cover the cost of transferring their lines and remain under lease agreements with SCE who remain owners of the underground utility trench. A list of streets where undergrounding was completed going back to 1968 is shown in Attachment A.
In January 2010, Resolution No. 10-7171 established District 22 on Bellflower Blvd spanning from I-105 Freeway to 900’ North of Imperial Highway. The Resolution outlined the scope, funding, and implementation strategies necessary to ensure the project's successful execution. The work was successfully completed in September 2016. In January 2007, Resolution No. 07-6965 also established procedures for forming Underground Utility District 23 along Lakewood Blvd from Gardendale St to Dalen St.
Utility Undergrounding work in District 23 was completed in December 2010.
The Underground Utility Districts 22 and 23 mandated the removal of poles, overhead wires, and associated structures, in accordance with Chapter 5, Article VII, of the Downey Municipal Code and CPUC Rule 20. This effort was part of a broader initiative to enhance the aesthetic and functional aspects of the area by transitioning to underground utilities.
The construction costs related to the undergrounding of utilities in Districts 22 and 23 were initially covered by the City through available local return funds like Proposition C and Measure R. Approximately 20 percent of the costs were reimbursed to the City through Rule 20B upon completion of the projects.
Use of CPUC Rule 20A funds for past projects
Southern California Edison (SCE) allocates funds to communities for undergrounding using formulas provided in the Rule 20 tariff established by the CPUC. Allocated funds are determined by the ratio of customers served by overhead facilities to the total number of customers in the community, and the fraction that customers in the community represent of all SCE customers. In the case of the City of Downey, SCE has allocated Rule 20A work credits totaling approximately $300,000 each year.
The typical cost to underground a mile of overhead utilities ranges from $2.5 million to $5.1 million, depending on whether the underground trench will carry transmission lines.
The transmission lines are much more expensive to underground because they require higher levels of insulation and protection in the trench due to the high voltage. Because utility undergrounding projects are expensive, time-consuming, and the work credits are insufficient to cover the full costs of the undergrounding projects, the City has either built up Rule 20A balances over multiples years to cover a project or petitioned SCE through Rule 20B. This allows the City to front the cost of an undergrounding project and receive a reimbursement of approximately 20 percent once the project is complete.
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In 2021, the CPUC ruled that utilities will no longer allocate work credit funds for Rule 20A projects. As a result of this ruling, the City will no longer receive the annual Rule 20A work credit allocation from SCE. Because the City has not had any recent utility undergrounding projects, there is a current balance of $2,971,528 that the City must put toward a project by June 2025.
ANALYSIS
In an effort to develop a plan for undergrounding utilities, staff first began by looking at the map of existing underground utility districts (Attachment B) and analyzed which arterial road segments still carry overhead utility poles. As a result of this analysis, the following table of arterial road segments has been developed to show the remaining arterial road segments needing undergrounding that can either use the remaining Rule 20A balance or could be petitioned for some reimbursement through Rule 20B at an appropriate point in the future when the City has funding available for a project. A map of the arterial segments in this table are shown in Attachment C.
ID STREET LIMITS LENGTH
(miles)
Rule 20A or
Rule 20B
ESTIMATED
COST (2024)
A Bellflower
Blvd.
Congressman Steve
Horn Way to Lakewood
Blvd.
1.3 20B $6,600,000
B Downey
Ave.
Gardendale St to
Firestone Blvd 2.4 20B $12,300,000
C Downey
Ave.
7th St to Santa
Gertrudes Dr. 1.2 20B $6,100,000
D Firestone
Blvd.
Arnett Street to West
City limit 0.4 20A $2,100,000
E Florence
Ave.
Arrington Ave. to East
City limit 1.3 20B $6,600,000
F Florence
Ave.
Tweedy Ln. to West City
limit 0.8 20B $4,100,000
G Foster Rd Clark Way to East End
(north side) 1.9 20B $9,500,000
H Lakewood
Blvd.
Florence Ave. to 900’
n/o Gallatin Rd. 0.7 20B $3,600,000
I Lakewood
Blvd.
900’ n/o Gallatin Rd. to
Telegraph 0.3 20A $1,500,000
J
Old River
School
Road
Imperial Hwy. to
Florence Ave 2.4 20B $12,200,000
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K Paramount
Blvd.
Firestone Blvd. to South
City limit 2.5 20B $12,800,000
L Paramount
Blvd.
Florence Ave. to Lubec
St. 0.3 20A $1,500,000
M Rives Ave Firestone Blvd to
Florence Ave 0.9 20B $4,400,000
N Stewart and
Grey Rd
Firestone Blvd. to
Bellflower Blvd 0.8 20B $4,000,000
O Stewart and
Grey Rd
Patton Rd. to West City
Limit 1.9 20B $9,700,000
P Telegraph
Rd
Lakewood Blvd to
Passon Blvd 0.6 20A $2,800,000
Q Telegraph
Rd
Lakewood Blvd to Rio
Hondo Channel 1.0 20B $5,200,000
R Washburn
Rd
Bellflower Blvd to
Regentview Ave 0.8 20B $3,800,000
S Woodruff
Avenue
Foster Road to
Firestone Blvd. 3.0 20B $15,300,000
Total $124,100,000
From this table, projects identified in the table as D, I, L, and P can individually qualify for the use of the Rule 20A work credits since they can each be fully covered by the remaining balance.
The approximate cost shown in the table for undergrounding utilities along these corridors is approximately $5,100,000 per mile. This is due to the fact that many of the joint utility poles on the arterial roads have some transmission lines carried at the top. As a result, the total cost for these 18 segments is approximately $124,100,000.
Utility Undergrounding Plan
Staff recommends focusing initial efforts on the arterial roads for utility undergrounding projects because attempting to underground utilities in residential neighborhoods will have a significant impact on the quality of life of the residents. Additionally, arterial powerlines are visible to all members of the community. Residential projects are time- consuming, require a lot of heavy equipment, and often require constructing across private property. Since residential projects do not qualify for Rule 20A or 20B funding, cities have to cover the full cost. The City can return to residential lines after work on the arterial lines is complete at some time in the future.
Given this recommendation, staff seeks the following direction from City Council:
Direction 1: Move forward with a plan focusing initially on undergrounding utilities in the arterial segments outlined in the previous table based on the previous recommendation.
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Option 1: Elect to move forward with ONLY the arterial segments in the table and return to discuss residential areas when arterials are complete in the future.
Given that the projected cost to underground these utilities is approximately $124 million, this is a project that will take many years into the future to complete. Looking at the existing table of underground utility districts, the City undergrounded approximately 15 miles of arterial road segments over a 47-year period. Given the costs and length of time to complete the remaining 24.5 miles of arterial road segments, the City is looking at a time horizon of approximately 50 years to complete the next set of work. However, having recognized the need, the City can begin setting aside funding for undergrounding work so that projects can be done when project balances reach an adequate level to complete the work. As a result, staff recommends setting up an undergrounding fund within the City’s budget, and depositing money into this account when surpluses are recognized at the end of budget years and after all other needs have been met for the City. Over time, the balance will build up and a project can be identified and completed.
Option 2: Elect to include residential streets in the overall utility undergrounding plan.
If this direction is provided, staff will return to City Council with potential costs and prioritization of residential areas for City Council to consider.
Direction 2: Provide direction to staff on which of the following four segments to move forward for use of remaining balance of Rule 20A funds:
ID STREET LIMITS LENGTH
(miles)
Rule 20A or
Rule 20B
ESTIMATED
COST (2024)
D Firestone
Blvd.
Arnett Street to West
City limit 0.4 20A $2,100,000
I Lakewood
Blvd.
900’ n/o Gallatin Rd. to
Telegraph
0.3 20A $1,500,000
L Paramount
Blvd.
Florence Ave. to Lubec
St.
0.3 20A $1,500,000
P Telegraph
Rd
Lakewood Blvd to
Passon Blvd
0.6 20A $2,800,000
Staff recommends choosing project D on Firestone Boulevard between Arnett Street to the West City Limit. This location is considered ideal for several reasons: it acts as the western entrance into the City along a major corridor; it completes the undergrounding of the entire Firestone Boulevard corridor; the final project costs will likely come in very close to the remaining Rule 20A work credit balance of $2,971,528 when factoring in inflation, labor increases, and change orders that may come up during the three-year period of the project.
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Following direction from the City Council, staff can begin coordination efforts with SCE for submittal of a pre-design application for consideration so that a project can be defined before the June 2025 deadline.. The process begins by putting together an application to SCE so that they can review the project limits and put together a design and cost estimate to complete the project. This typically takes approximately one year to complete.
Once an application has been approved, staff can return with a resolution to form the underground utility district, as required under the Downey Municipal Code and CPUC Rule 20. The total time to complete one of these Rule 20A projects is approximately 3 years – one year to complete the application and design period, one year to complete first phase of constructing the utility trench, and one year to complete the second phase of transferring all overhead utilities to the underground facilities. The City does not need to complete the project by June 2025, but it does need to select a project that can be covered by the available Rule 20A work credit balance and get it approved as a project by SCE before this deadline.
CITY COUNCIL PRIORITIES
Quality of Life, Safety & Infrastructure
FISCAL IMPACT
There is no fiscal impact with this report.
ATTACHMENTS
Attachment A: Existing Underground Utility Districts in City of Downey Attachment B: Map of Existing Underground Utility Districts Attachment C: Proposed Arterial Road Segments for Utility Undergrounding
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Attachment A – Existing Underground Utility Districts
UUD No. STREET LIMITS YEAR ESTABLISHED YEAR COMPLETED
1 Brookshire Ave. Manatee Rd. to UPRR Tracks 1968 1969
1 Manatee St. Brookshire Ave. to Patton Rd. 1968 1969
1 Patton Rd. Manatee Rd. to 862.28’ north 1968 1969
2 Paramount Blvd. UPRR to 3rd St. 1969 1970
3 Paramount Blvd. 3rd St. to 7th St. 1969 1970
4 Paramount Blvd. 7th St. to Florence Ave. 1972 1973
5 Imperial Hwy. Old River School Rd. to Rives Ave. 1971 1972 6 Firestone Blvd. Dolan Ave. to Woodruff Ave. 1976 1977 7 Brookshire Ave. Steward & Gray Rd. to Manatee Rd. 1974 1975 8 Brookshire Ave. Firestone Blvd. to 3rd St. 1975 1975
8 3rd St. Downey Ave. to Brookshire Ave. 1975 1975
8 Downey Ave. 2nd St. to 3rd St. 1975 1975
8 2nd St. Downey Ave. to Dolan Ave. 1975 1975
8 2nd St. Dolan Ave. to Brookshire Ave. 1975 1975
8 Dolan Ave. Firestone Blvd. to 2nd St. 1975 1975
8 Dolan Ave. 2nd St. to 3rd St. 1975 1975
9 5th St. Brookshire Ave. to Birchdale St. 1975 1975
10 5th St. Downey Ave. to Brookshire Ave. 1978 1979
11 Firestone Blvd. Arnett St. to Paramount Blvd. 1981 1983 12 Firestone Blvd. Woodruff Ave. to East City limit 1987 1991 13 Alley e/o Downey
Ave.
Firestone Blvd. to 2nd St. 1987 1988
14 Nance St. Myrtle Ave. to La Reina Ave. 1988 1990
15 2nd St. Paramount Blvd. to La Reina Ave. 1988 1990
15 3rd St. Paramount Blvd. to La Reina Ave. 1988 1990
16 Florence Ave. Tweedy Ln. to Arrington Ave. 1989 1992 17 Imperial Hwy. West City limit to East City limit 1998 2002 18 Lakewood Blvd. Imperial Hwy. to 5th St. 2004 2006
19 Lakewood Blvd. Imperial Hwy. to I-105 2004 2006
20 Bellflower Blvd. 900’ n/o Imperial Hwy. to Cong. Steve Horn Way
2005 2008
21 Lakewood Blvd. 5 St. to Florence Ave. 2006 2011
21 Lakewood Blvd. Florence Ave. to 900’ n/o Gallatin Rd. 2006 Not completed 22 Bellflower Blvd. I-105 to 900’ n/o Imperial Hwy. 2010 2016 23 Lakewood Blvd. Gardendale St. to 550’ s/o Dalen St. 2007 2010
21 NO
WORK DONE
21181415 8
74517
17 1323 126
16 11
10 9
1923
2 0
2 2
1 ®
0 0.80.4 Miles
EXISTING UNDERGROUND UTILITY DISTRICT
CITY OF DOWNEY
UUD
1 10
11 12
13 14
15 16
17 18
19 2
20 21
21 NO WORK DONE
22 23
3 4
5 6
7 8
9 ATTACHMENT: B
ATTACHMENT: C ¥0 0.5 10.25 Miles
PROPOSED ARTERIAL ROAD SEGMENTS FOR UTILITY UNDERGROUNDING Q P
I
C
R
N
A
BK
J
L
O
F
M
S
G
E
D
CITY OF DOWNEY