STAFF REPORT
Meeting Date:
April 14, 2026
BUSINESS
18 SUBJECT: PROPOSED UNDERGROUND UTILITY ASSESSMENT DISTRICT 2025-3 (BLUEBIRD CANYON DRIVE)
RECOMMENDATION: It is recommended that the City Council:
1. Direct staff to establish a fund for proposed Underground Utility Assessment District 2025-3, as shown on the attached Boundary Map;
2. Appropriate $310,000 from the Wildfire Mitigation and Fire Safety Fund for assessment engineering, bid document preparation, and utility designs for the proposed assessment district;
3. Direct staff to request that utility companies proceed with design for the proposed assessment district and authorize the City Manager to enter into necessary utility company agreements and make advance payments to the utility companies for their designs;
4. Direct staff to solicit proposals for assessment engineering, bid document preparation, and street lighting design for the proposed assessment district; and
5. Determine that the action is exempt from the California Environmental Quality Act pursuant to CEQA guidelines section 15301(b), 15302(c) & (d), and 15303(d).
SUMMARY OF THE MATTER
This report recommends that the City Council initiate the formation process and fund preliminary design and engineering for Proposed Underground Utility Assessment District 2025-3 (Bluebird Canyon Drive), which includes 158 parcels as shown in Attachment 1. The City has received petitions from 84 property owners, meeting the required 50% threshold under the revised 2025 Assessment District Formation Policy.
The estimated upfront cost of $310,000 will be advanced from the Wildfire Mitigation and Fire Safety Fund and reimbursed if the district is formed by a weighted majority vote. The proposed action is exempt from CEQA under Guidelines Sections 15301(b), 15302(c) and (d), and 15303(d).
DISCUSSION
PROPOSED UNDERGROUND UTILITY ASSESSMENT DISTRICT 2025-3 (BLUEBIRD
CANYON DRIVE)
April 14, 2026
In 2025, the City Council adopted the revised Underground Utility Assessment District Formation Policy.
Major changes to the policy included lowering the threshold of signed petitions by at least 60% of property owners with proposed district boundary to at least 50% and eliminating the requirement of a $500 deposit from each petitioner to be used toward startup costs.
The Bluebird Canyon Drive assessment district consists of 158 parcels. The proponents submitted 84 signatures, representing approximately 53% percent of the affected property owners within the project boundary.
Easement Requirements
This project will require the acquisition of easements over private property. Many parcels in the proposed district reside along privately owned roads such as Crabbe Way, Didrikson Way, Keller Way, Saling Way, and Jefferson Way. These streets are lettered lots in Tract Number 989, which was never accepted by the City for public purposes and remains privately owned. The number and locations of easements needed cannot be determined until final designs have been completed. The necessary costs of easement acquisition would be included in the bonds issued for the assessment district.
If required, easements cannot be acquired through informal negotiations; an eminent domain process will be considered to acquire the easements. Initial efforts to form this district began in 2019; however, progress was halted during the COVID-19 pandemic. Property owners re-engaged with City staff in early 2025 to continue the formation process. Over the past year, City staff have met with several proponents to provide a high-level overview of the district formation, easement acquisition, and eminent domain process. Staff will return to the City Council at a later date with an update on the easement acquisition process and estimated costs should the eminent domain process be required to construct the underground utilities within the private streets.
Public Involvement and Notice
Property owners in the proposed assessment district area have been made aware of the project through meetings with City staff, emailed notices, and personal visits from the project proponents and staff. The team of proponents have canvased the neighborhood to explain the project and associated benefits; however, to ensure all property owners were responsibly notified of the project and the April 14, 2026, City Council meeting, all of the property owners within the proposed assessment district were notified by mail on March 27, 2026.
Street Lighting Design
Streets within the district boundary do not have existing street lights except for two overhead-fed street lights along Madison Place. These lights will be replaced in-kind and connected to the new underground utility system. Staff conducted initial outreach to project proponents who are generally not in favor of adding new street lights within the neighborhood. Additional outreach will take place to confirm if no additional street lights are needed or if there is a desire by property owners for street lights at select locations within the district. Costs associated with the design and construction of the street light system would be included in bonds issued for the assessment district.
PROPOSED UNDERGROUND UTILITY ASSESSMENT DISTRICT 2025-3 (BLUEBIRD
CANYON DRIVE)
April 14, 2026
FINANCIAL ANALYSIS
In accordance with the undergrounding policy, the City could fund upfront costs for underground utility assessment districts with a cash advance from the Wildfire Mitigation and Fire Safety Fund. If the appropriation is approved, the Wildfire Mitigation and Fire Safety Fund will have approximately $1.3 million remaining to fund future projects. Anticipated upfront costs are listed in the table below:
Assessment Engineering $75,000
Bid Document Preparation $10,000
SCE Design Fee $130,000
Cox Design Fee $15,000
Frontier Design Fee $15,000
PROPOSED UNDERGROUND UTILITY ASSESSMENT DISTRICT 2025-3 (BLUEBIRD
CANYON DRIVE)
April 14, 2026
Street Lighting Design $40,000
Entitlements $25,000
Total Expense $310,000
Once the design and assessment engineering has been completed and assessment amounts are known, property owners will then vote on the proposed district. Votes from each property owner within the district will be weighted based on the proposed assessment amount for each property. For example, a vote from a property with a high assessment will be weighted more than a vote from a property with a lower assessment amount. If a weighted majority approves the creation of the assessment district, then the City will be reimbursed its upfront costs from the newly formed district. If the formation of the district fails, then the City will not be refunded for money spent on design and assessment engineering.
In addition to the costs described above, utility undergrounding projects also provide a “general benefit” to the surrounding neighborhoods or the public at large and are paid by the City. The amount of the general benefit would be determined during the assessment engineering phase and could be approximately 10 percent of the total project cost. The general benefit contribution would be due at the time of formation.
ENVIRONMENTAL ANALYSIS
Actions related to the formation of an undergrounding district are exempt from CEQA pursuant to State CEQA Guidelines, section 15302 (Replacement or Reconstruction) as it consists of the possible formation of an undergrounding utility assessment district to fund the replacement or reconstruction of existing structures and facilities where the new structure will be located on the same site as the structure replaced and will have substantially the same purpose and capacity as the structure replaced, including but not limited to: (1) conversion of overhead electric utility distribution system facilities to underground including connection to existing overhead electric utility distribution lines where the surface is restored to the condition existing prior to the undergrounding; and (2) replacement or reconstruction of existing utility systems and/or facilities involving negligible or no expansion of capacity. Here, the formation of an undergrounding district involves the possible formation of an undergrounding utility assessment district to fund the reconstruction of an electric utility system by removing above ground utilities and reconstructing them below ground. The new undergrounding system will be located on the same site and will have substantially the same purpose and capacity (i.e., providing electricity to structures). The undergrounding district, if approved, involves the removal of approximately 58 utility poles and undergrounding of approximately 7,300 linear feet of overhead wires and therefore constitutes conversion of overhead electric utility distribution system facilities to underground. Further the formation of an undergrounding district involves the following aboveground equipment to be installed to accommodate the undergrounding: riser poles, vent standpipes, guy anchors, utility cabinets, pedestals, and street lights.
The formation of an undergrounding district is also categorically exempt from CEQA under the following State CEQA Guidelines, Sections 15301(b) and 15303(d). Section 15301(b) exempts projects that pertain to existing facilities of both investor and publicly owned utilities used to provide electric power, natural gas, sewerage, or other public utility services. Here, the formation of an undergrounding district is exempt under Section 15301(b) because it consists of existing facilities providing electric power with no expansion of use. Section 15303(d) exempts projects that pertain to construction and location of limited new, small PROPOSED UNDERGROUND UTILITY ASSESSMENT DISTRICT 2025-3 (BLUEBIRD
CANYON DRIVE)
April 14, 2026
facilities or structures, including water main, sewage, electrical, gas, and other utility extensions, including street improvements, of reasonable length to serve such construction. Here, the formation of an undergrounding district is exempt under Section 15303(d) because it consists of new construction of small utility facilities or structures.
In the alternative, the formation of an undergrounding district consists of the creation of government funding mechanisms or other government fiscal activities, which do not involve any commitment to any specific project, which may result in a potentially significant physical impact on the environment and therefore does not constitute a “project” within the meaning of the California Environmental Quality Act. (Public Resources Code Section 21065; CEQA Guidelines, section 15378(b)(4).)
ATTACHMENTS
1. Boundary Map (Pg. 5)
Submitted By:
.Mark McAvoy Approved: .David A Kiff
Mark McAvoy, Director of Public
Works & Utilities
Dave Kiff, City Manager
Report Prepared By: Coordinated With:
Pierre Sawaya, Capital Program Manager
Alondra Aguirre, Administrative Assistant
Thomas Perez, City Engineer
Michelle Bannigan, Finance Director
Patrick Donegan, Assistant City Attorney