CITY COUNCIL STAFF REPORT
DATE: March 11, 2026 CONSENT CALENDAR
SUBJECT: APPROVAL OF A RESOLUTION TO ACCEPT PETITION
CERTIFICATION OF OLD LAS PALMAS UNDERGROUND UTILITY
ASSESSMENT DISTRICT NO. 2, INITIATE FORMATION OF THE
DISTRICT AND PROCEED WITH ASSESSMENT ENGINEER’S REPORT
AND BALLOTING
FROM: Scott C. Stiles, City Manager
BY: Engineering
SUMMARY:
Residents within a roughly 24-acre area of the Old Las Palmas Neighborhood have submitted a petition to the City of Palm Springs (City), that was signed by at least 60 percent of the affected property owners, requesting formation of Underground Utility Assessment District Number 2. The next step in the assessment district process would be for the City to deposit funds from the Neighborhood Committee for Consulting fees and direct our on-call Assessment Engineer to prepare an Engineer' s Report and to circulate ballots for a property owner vote on a proposed assessment. Staff would assist the process by developing and soliciting a property owner vote in the coming months to be based on a conservative cost estimate developed at the completion of the schematic level design.
RECOMMENDATION:
1. Staff recommends the City Council find this project exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15302 (d) (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).
2. Adopt Resolution entitled, “A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF PALM SPRINGS, CALIFORNIA, ACCEPTING PETITION OF OLD LAS PALMAS ASSESSMENT DISTRICT NO. 2”.
3. Authorize staff to collect deposits from the Old Las Palmas Neighborhood in an amount sufficient to order the necessary Assessment Engineering Services from
City Council Staff Report
March 11, 2026 -- Page 2
Old Las Palmas Underground Utility District No. 2
our on-call Assessment Engineer to prepare the Engineer’s Report in compliance with Proposition 218.
4. Authorize the City Manager to execute all necessary documents.
BUSINESS PRINCIPAL DISCLOSURE:
N/A.
BACKGROUND:
On November 21, 2024, Council approved an ordinance amending Chapter 8.04 of the Municipal Code and codifying a procedure for the formation of new underground utility districts. A group of residents within the Old Las Palmas neighborhood approached the City with an interest in forming an assessment district under the California Public Utilities Commission (CPUC) Rule 20B program to facilitate undergrounding their overhead utilities (electric, phone and cable). The Neighborhood Committee has followed the Underground Utility District Formation Guidelines for Rule 20B and Rule 20C Projects adopted on 11-21-2024 (“Guidelines”) and completed the exploratory and petition phases.
The undergrounding project is planned within the public right-of-way and will cover a portion of the Old Las Palmas Neighborhood of approximately 24 acres. The proposed properties within the Assessment District are generally bounded by North Camino Del Corto to the east, W. Via Lola to the north, North Via Monte Vista to the west and W.
Hermosa Place/W. Mountain View Place to the south as shown in the Assessment District Boundary Map.
STAFF ANALYSIS:
The property owners of Proposed Underground Assessment District No. 2 for the Old Las Palmas Neighborhood (AD 2) have submitted a petition to the City requesting a Special Assessment District be formed, pending approval of a district-wide vote, to finance the undergrounding of overhead utilities within the proposed district. The boundaries as described above of the proposed AD 2 are shown in Attachment A.
One of the initial steps in the district formation process is the circulation of the Petition for Special Assessment Proceedings (Petition). An example of the Petition form is shown in Attachment B. Proponents of AD 2 circulated the Petition to property owners within the proposed district and have now submitted the petition signatures to the City. The submitted signatures represent just over 60 percent of the assessable land within the proposed district. The City's guidelines require a minimum of 60 percent in favor of the district in order to proceed with the formation of a district. The City's consultant, NV5 Inc., has reviewed and certified that owners representing over 60 percent of the assessable property within proposed AD 2 have signed the Petition in support of undergrounding the overhead utilities.
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March 11, 2026 -- Page 3
Old Las Palmas Underground Utility District No. 2
Staff recommends that the City Council adopt a resolution, shown in Attachment C, accepting the petition for Old Las Palmas Assessment District No 2.
Staff is proposing that the expedited formation process be utilized for this district, which is outlined in the Underground Utility District Formation Guidelines for Rule 20B and Rule 20C Projects adopted 11-21-2024 (“Guidelines”). This process reduces the financial risk to the City and builds on the momentum started during the signature gathering time for the Petition. The process proposed will be as follows: City staff collects a deposit from the Neighborhood Committee and retains an assessment engineer to prepare the Engineer's Report and prepare ballots for the property owners to vote on the undergrounding proposal. The vote will be based on a conservative cost estimate developed at the completion of the schematic level design rather than waiting for the completion of all the necessary utility company design work (which can typically range between 18 to 24 months).
If the vote for AD 2 is successful, with formation completed, the City will then direct final utility design. It is estimated to take approximately two years after a successful early vote to complete the design and bid the work. If the vote for AD 2 is unsuccessful, the City will stop all further work and not incur additional design costs.
The City has an on-call professional services agreement with NV5, included in Attachment D, for Assessment Engineering and upon receipt of fund deposits from the Neighborhood Committee, will order the Assessment Engineer’s report and balloting for AD 2.
ENVIRONMENTAL ASSESSMENT:
Staff recommend that the City Council find this project exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15302(d) (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).
ALIGNMENT WITH STRATEGIC PLANNING:
This item aligns with the following City Council Strategic Plan Broad Goal: Infrastructure and Facilities.
FISCAL IMPACT:
No fiscal impact to the City. Funding of the Engineer’s Report and balloting will be deposited with the City by the Old Las Palmas Neighborhood Committee. If the Assessment District is successfully formed, and once the City receives funding from Proposed District Bond Issue, the City will reimburse the Deposit out of the Bond funds.
City Council Staff Report
March 11, 2026 -- Page 4
Old Las Palmas Underground Utility District No. 2
REVIEWED BY:
Department Director: Joel Montalvo
Deputy City Manager: Flinn Fagg
City Manager: Scott Stiles
ATTACHMENTS:
A. Proposed Assessment District Boundary Map
B. Petition
C. Resolution No. _____
D. Professional Services Agreement 25Q085 with NV5, Inc.