Agenda Item No. 6
CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: February 13, 2024 FROM: Matthew Bronson, City Manager
PREPARED BY: Steve Kahn, Interim Public Works Director/City Engineer Gabriel Munoz-Morris, Senior Engineer
SUBJECT: Resolution Establishing Ramona Garden Park Rule 20A Utility Undergrounding District
RECOMMENDATION
Adopt a Resolution establishing the Ramona Garden Park Utility Undergrounding District and authorize staff to work with Pacific Gas and Electric to pursue a Rule 20A utility undergrounding project at Ramona Garden Park.
BACKGROUND
The California Public Utilities Commission (CPUC) has authorized electric utility providers to convert overhead utility lines and facilities to underground through a process outlined in Electric Rule 20. Specifically, Rule 20A allows for the conversion of qualifying overhead facilities to underground in jurisdictions with adopted resolutions for undergrounding districts through the use of Rule 20A credits. Credits are allocated to jurisdictions based on utility rates paid by rate payers in that area. The City of Grover Beach currently has $816,350 in Rule 20A credits that could be used for a utility undergrounding project in the city. The CPUC has guidelines for projects to qualify for Rule 20A credits which severely limits the projects a jurisdiction can prioritize for completion.
As a result of these minimum guidelines for Rule 20A projects, utility undergrounding projects utilizing Rule 20A credits typically cost several millions of dollars or more. In addition to these project guidelines, the CPUC has officially announced a wind-down of the Rule 20A program over the next 10 years and has directed utility providers to re-allocate Rule 20A credits for non-active communities to other active projects to prioritize project completion prior to the program sunset date in 2033. As a result of this direction from the CPUC, Pacific Gas & Electric (PG&E), the electric utility provider in Grover Beach, reached out to the City to inform the City that the City’s credits would be re-allocated to another community’s project if the City did not identify a Rule 20A project to pursue making use of the credits it currently has available and become an “active” community in the Rule 20A program.
There are various areas in the city that could be prioritized to convert overhead utilities to underground but the Rule 20A credit amount and minimum project guidelines for Rule 20A projects limit projects the City could propose for approval by the CPUC and PG&E. The City could pursue an undergrounding project that does not qualify for Rule 20A credits but would have to fund the entire project cost and forego any current Rule 20A credits the City has for re-allocation to another community. After analysis by staff and getting input from PG&E’s Rule 20A coordinator, staff identified the undergrounding of the utility lines that cross Ramona Garden Park as a project that would qualify for use of Rule 20A credits and would be within the City’s credit amount based on initial cost estimates by PG&E. This project would also align with the City’s goal to rehabilitate Staff Report: Ramona Garden Park Rule 20A Utility Undergrounding District Page 2 February 13, 2024
Ramona Garden Park through the four-phased project (CIP 1259) that is currently in design. The proposed project would also align with prior direction from Council for staff to investigate the possibility of pursuing a Rule 20A project at Ramona Garden Park that would cost less than the City’s Rule 20A credit amount.
Staff prepared a proposed Utility Undergrounding District boundary map for review by PG&E and approval by CPUC staff (Attachment 2). The proposed project would underground the utility lines crossing through the park from Ramona Avenue to Brighton Avenue and, pending credit availability and projected costs, the utility lines running along Ramona Avenue from North 9th Street to North 10th Street (See Attachment 3). The initial cost estimate for this project from PG&E is between $767,397 and $1,534,790. This estimate is preliminary and will be refined after the City adopts a resolution for prioritizing this undergrounding district and PG&E’s design team begins work.
If the overall project estimate exceeds the City’s available credits, PG&E will return to the City to consider an agreement that will require the City to agree to fund the difference between the estimated project cost and the City’s credit amount. The project cost estimate will vary depending on site-specific conditions, construction costs at time of eventual construction, and currently unknown factors that will be revealed and addressed during the design phase of the project. The City is not bound at this time to any cost as a result of passing the proposed resolution. Given the wide range for the ultimate project cost shared by PG&E, staff would return to Council for direction on whether to continue with design efforts if the project cost estimate from PG&E exceeds the City’s credit amount to ensure that anticipated costs to the City are understood and budgeted for.
Pending adoption of the Ramona Garden Park Utility Undergrounding District resolution, staff will work with PG&E to formally qualify the City as an “active” Rule 20A community and ensure that the City’s credits cannot be re-allocated to another community’s project. PG&E will then begin the design process for the project and coordinate with City staff as new information about the project is available. To ensure coordination between the Ramona Garden Park Rehabilitation Project and this utility undergrounding project, staff will also maintain constant communication with PG&E to ensure that any changes to the park layout are implemented in the undergrounding project design, which will avoid unexpected cost increases to the undergrounding project.
FISCAL IMPACT
There is no fiscal impact of adopting this resolution. Once the resolution is adopted and PG&E begins the initial design process, the project cost estimate will continue to be refined to reflect updated construction costs, project scope specifics, and previously unexpected conditions discovered during the design effort. As this cost estimate is refined, PG&E will return to the City to confirm any costs in excess of the City’s available Rule 20A credits and staff would then seek Council direction as to whether to identify City funding for the remaining amount.
The City currently has $816,350 in available Rule 20A credits that would be secured through the adoption of this resolution and the initial project cost estimate from PG&E is between $767,397 to $1,534,790. The passage of this resolution does not obligate the City to agree to pay for any future funding gap at this time. Depending on the ultimate cost to the City, staff would return to Council at a future date to make a recommendation regarding what funding source to allocate for a potential funding gap resulting from an increased project cost estimate.
Staff Report: Ramona Garden Park Rule 20A Utility Undergrounding District Page 3 February 13, 2024
ALTERNATIVES
The Council has the following alternatives to consider:
1. Adopt a Resolution establishing the Ramona Garden Park Utility Undergrounding District and authorize staff to work with Pacific Gas and Electric to pursue a Rule 20A utility undergrounding project at Ramona Garden Park; or
2. Provide alternative direction to staff.
PUBLIC NOTIFICATION
A Public Hearing Notice was published in the New Times on February 1, 2024. The agenda was posted in accordance with the Brown Act.
Attachments
1. Resolution
2. Proposed Utility Undergrounding District
Attachment 1
RESOLUTION NO. 24-__
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GROVER BEACH, CALIFORNIA ESTABLISHING THE RAMONA GARDEN PARK UNDERGROUND UTILITY DISTRICT WHEREAS, the California Public Utilities Commission (CPUC) has authorized electric and telecommunication utilities to convert overhead utility lines and facilities to underground pursuant to Electric Rule 20 and Telecommunication Rule 32; and
WHEREAS, pursuant to certain criteria, CPUC rules allow participating cities and counties to establish legislation authorizing the creation of underground utility districts within which existing overhead electric distribution and telecommunication distribution and service facilities will be converted to underground; and
WHEREAS, the City of Grover Beach, has adopted an ordinance authorizing the City Council to designate areas within which all existing overhead poles, overhead wires and overhead equipment associated with the distribution of electric power, telecommunication services and cable television should be removed and replaced with underground wires and facilities; and WHEREAS, the Director of Public Works for the City of Grover Beach has consulted with the affected public utilities and such utilities have agreed that the proposed underground conversion district, designated the Ramona Garden Park Underground Utility District and more particularly described in Exhibit 1 attached hereto and incorporated herein by reference, meets the criteria established by the rules of the CPUC, to wit, That such undergrounding will avoid or eliminate an unusually heavy concentration of overhead electric facilities; and
That the street or road or right-of-way adjoins or passes through a civic area or public recreation area or an area of unusual scenic interest to the general public; and WHEREAS, each year the City of Grover Beach is notified by PG&E regarding the allocation of work credits for conversion of overhead electric distribution lines and facilities to underground, known as Rule 20A allocations; and
WHEREAS, the City of Grover Beach and the affected utilities have agreed by letter that each utility shall complete the engineering of their respective portion of the Ramona Garden Park Overhead to Underground Utility Conversion Project; and WHEREAS, the City of Grover Beach and the affected utilities have agreed by letter that Pacific Gas and Electric shall be responsible for preparation of the trench profile and composite drawings and that Pacific Gas and Electric shall be designated as “trench lead” to manage trenching, installation of substructures, and pavement restoration and such other work; and WHEREAS, the Director of Public Works of the City of Grover Beach and the affected utilities have agreed on a work schedule which meets their respective capabilities and further agreed to waive any administrative fees, costs or special street restoration requirements for purposes of this project; and
Resolution No. 24-__ Page 2
WHEREAS, to the extent required, the City of Grover Beach has agreed to provide easements or rights of way on private property as may be necessary for installation of utility facilities in a form satisfactory to the affected utilities; and WHEREAS, the City Council of the City of Grover Beach has now received the report from the Director of Public Works recommending that the area identified in Exhibit 1 should be designated as an underground utility district within which all existing overhead poles, overhead wires and overhead equipment associated with the distribution of electric power, telecommunication services and cable television should be removed and replaced with underground wires and facilities; and
WHEREAS, upon the recommendation of the Director of Public Works, the City Council of the City of Grover Beach has determined that the proposed Ramona Garden Park Underground Utility District is categorically exempt from environmental review pursuant to the California Environmental Quality Act; and
WHEREAS, the City of Grover Beach has notified all affected property owners within the proposed Ramona Garden Park Underground Utility District and inviting same to attend a public hearing to discuss formation of the proposed district; and WHEREAS, the City Council of the City of Grover Beah held public hearings at which time the Council did receive and consider the recommendation of the City Engineer and did hear any and all objections or protests that were raised by the owners of property within the above described district pertaining to designating this area an underground utility district; NOW THEREFORE, BE IT HEREBY RESOLVED by The City Council of the City of Grover Beach that:
Section 1. The public interest requires the removal of all existing utility poles [excepting those poles supporting streetlights, traffic signals or trolley lines], overhead wires and associated overhead structures and installation of underground wires and facilities for supplying electric power, communication, or similar associated services within the areas as shown in Exhibit 1, attached hereto, with such area being designated as the Ramona Garden Park Underground Utility District; and
Section 2, That the utility companies, cable television services and other affected services shall commence work on installation of underground facility installation in Ramona Garden Park Underground Utility District and that as each phase of the project is complete and ready for conversion from overhead to underground utility facilities, all fronting property owners shall be notified by first class letter, postage pre-paid, of the schedule for conversion of all utility service lines; and
Section 3, The electric utility shall use the underground conversion allocation computed pursuant to decisions of the California Public Utilities Commission for the purpose of providing to each premises requiring it in Ramona Garden Park Underground Utility District a maximum of one hundred feet of individual electric service trenching and conductor (as well as backfill, paving and conduit, if required) and each other serving utility shall provide service trenching and conductor in accordance with its rules and tariffs on file with the California Public Utilities Commission or as required by its Franchise Agreement with the City of Grover Beach; and Resolution No. 24-__ Page 3
Section 4. The electric utility shall use said underground conversion allowance allocation, up to a maximum amount of $1500 per service entrance excluding permit fees, for the conversion of electric service panels to accept underground service in the Ramona Garden Park Underground Utility District, and the City of Grover Beach shall be financially responsible for any and all costs not covered by the electric utility for the installation and maintenance of the conduit and termination box located on, under or within any structure on the premises served; and Section 5. That upon notification as specified in Section 2, all property owners in Ramona Garden Park Underground Utility District shall have underground electrical entrance facilities installed and inspected pursuant to the City of Grover Beach Electrical Code within sixty (60) days and that should any property owner fail to install satisfactory underground electrical entrance facilities by the date specified in the notice, the electric utility shall notify the Director of Public Works who shall, within thirty (30) days direct the electric utility in writing to discontinue electrical service to the property, without recourse, pursuant to Rule 11 until electrical entrance facilities are ready to accept underground electrical conductors and have passed the necessary inspection requirements; and
Section 6. That once all services have been converted from overhead to underground, the utility companies, cable television services and other affected services shall remove all poles (except as specified above) and associated overhead facilities in Ramona Garden Park Underground Utility District.
On motion by Council Member __________, seconded by Council Member ________, and on the following roll-call vote, to wit:
AYES: Council Members –
NOES: Council Members –
ABSENT: Council Members –
ABSTAIN: Council Members –
RECUSED: Council Members –
the foregoing Resolution was PASSED, APPROVED, and ADOPTED at a regular meeting of the City Council of the City of Grover Beach, California this 13th day of February 2024.
KAREN BRIGHT, MAYOR
Attest:
WENDI B. SIMS, CITY CLERK
**DRAFT**
- District Boundary
0 50'
Attachment 2
Attachment 3
Ramona Garden Park – Existing Overhead Utility Lines to be undergrounded Utility Lines to be
Undergrounded (1 of 2)
Utility Lines to be
Undergrounded (2 of 2)