CITY COUNCIL STAFF REPORT
DATE: AUGUST 26, 2026 CONSENT CALENDAR
SUBJECT: APPROVAL OF A RESOLUTION OF INTENTION AND A RESOLUTION PRELIMINARILY APPROVING THE ENGINEER’S REPORT FOR
PROPOSED OLD LAS PALMAS UNDERGROUND UTILITY
ASSESSMENT DISTRICT NO. 1
FROM: Scott C. Stiles, City Manager
BY: Department of Engineering Services
SUMMARY:
The property owners within a roughly 30-acre area of the Old Las Palmas neighborhood submitted a petition requesting formation of an underground utility assessment district (Old Las Palmas Underground Utility Assessment District No. 1 [“AD 1”]). The City Council certified the petition for AD 1 on October 22, 2025. This action requests City Council declare its intention to levy assessments and issue bonds to finance the undergrounding project, approve the Preliminary Assessment Engineer’s Report, and set October 28, 2026, as the time and place for a public hearing for AD 1.
RECOMMENDATION:
1) Adopt Resolution No. _____, “A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF PALM SPRINGS, CALIFORNIA, DECLARING ITS INTENTION TO
TAKE PROCEEDINGS PURSUANT TO THE MUNICIPAL IMPROVEMENT ACT OF 1913 AND TO ISSUE BONDS PURSUANT TO THE IMPROVEMENT BOND ACT OF 1915, AND MAKING CERTAIN FINDINGS AND DETERMINATIONS IN
CONNECTION THEREWITH, ALL RELATING TO THE FORMATION OF OLD LAS PALMAS UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 1”; and 2) Adopt Resolution No. _____, “A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF PALM SPRINGS, CALIFORNIA, PRELIMINARILY APPROVING THE ASSESSMENT ENGINEER’S REPORT AND FIXING THE TIME AND PLACE OF
THE PUBLIC HEARING FOR OLD LAS PALMAS UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 1.”
BUSINESS PRINCIPAL DISCLOSURE:
N/A.
City Council Staff Report
August 26, 2026 -- Page 2
Underground Utility Assessment District No.1
BACKGROUND:
Owners of property located in the proposed assessment district submitted a petition to the City of Palm Springs in August 2025 requesting formation of a special assessment district to underground overhead utilities within a portion of the Old Las Palmas neighborhood. On October 6, 2025, the assessment engineer certified that owners representing more than 60 percent of the assessable property area within proposed AD 1 had signed a petition for undergrounding overhead utilities. On October 22, 2025, the City Council adopted Resolution No. 25346 accepting and certifying the petition for AD 1.
STAFF ANALYSIS:
The Municipal Improvement Act of 1913 (Streets and Highways Code Division 12, Section 10000 et. seq.) governs the procedures used to create the assessment district. Bonds issued under the Improvement Bond Act of 1915 (Streets and Highways Code Division 10, Section 8500 et. seq.) are issued to finance assessments not paid in cash within 30 days after confirmation of the assessment; the proposed Resolution of Intention provides for bonds with a maximum 20-year maturity.
If, following the public hearing and balloting, AD 1 is formed an assessment lien would be recorded on the title of properties included in the district. Thereafter, a cash collection period would take place to provide property owners with an opportunity to prepay their assessment and remove the assessment lien. A second cash collection period is also anticipated prior to the bond sale, which is anticipated to occur prior to construction and after design is complete. Design is estimated to be completed in twelve (12) to eighteen (18) months. The total estimated assessment for Proposed AD 1 is shown in Table 1:
Table 1 – Proposed Assessment District No. 1
ITEM COST
Cost of Design and Construction $4,767,000
Incidental Costs and Expenses $697,500
Financing (Bond) Costs $475,000
Estimated Total Cost: $5,939,500
In addition to payment of the assessment, each property owner will be responsible for the costs of connecting the main service conduit in the public right-of-way to the property owner’s home or business, if applicable. The cost to the property owner for this conversion varies depending on the condition and location of the current electrical service. Each property owner is encouraged to contact a licensed electrical contractor to assess their particular property needs.
Preliminary Engineer’s Report:
The preliminary Engineer’s Report describes the methodology for determining the proportionate special benefit for each property within the proposed district, and the resulting allocation of project costs.
City Council Staff Report
August 26, 2026 -- Page 3
Underground Utility Assessment District No.1
Special Benefits:
To equitably assess benefits, the Assessment Engineer related each property’s proportional special benefits to the special benefits of all other properties within the district. Apportionments established for districts formed under the “Municipal Improvement Act of 1913” and Article XIIID of the State Constitution, commonly utilize a weighted apportionment method using a defined unit of measurement to calculate a basic unit of assessment. Collectively, the three benefit categories reflect the proportional special benefit each property within the district will receive. The total cost of the district will be apportioned using the benefit categories below with assigned weighted percentages to each benefit category, based upon the engineer’s field review of the parcels within the district and public testimony. The weighted apportionment of the benefit categories for the proposed district shown in Table 2:
Table 2 – Weighted Benefit
Benefit Category Percentage
Safety Benefit 33.33%
Aesthetics Benefit 33.33%
Reliability Benefit 33.33%
Safety Benefit:
Undergrounding the overhead facilities eliminates the threat to structures or property, including any occupants within, from being damaged or harmed by downed utility lines and poles. The removal of overhead facilities would also mitigate the risks of blocked driveways and access to properties. The removal of the fixed obstructions (existing utility poles, guy wires, and related facilities), and the mitigation of the potential delay by emergency responders, who will neither cross a downed utility line, nor set up equipment if an overhead power line is in the way, has been evaluated in the Engineer’s Report as part of the special-benefit and general-benefit analysis required by Article XIIID. All parcels within the district receive a special benefit from the undergrounding of poles and wires and share in the cost associated with this safety benefit as apportioned in the Engineer’s Report. The assessment report provides a breakdown for each parcel.
Aesthetics Benefit:
Removing the overhead utilities will improve the overall neighborhood aesthetics for all properties within the district. The special benefit results from improved aesthetics of the streetscape and airspace directly surrounding each property. Each parcel within the district will receive an aesthetic benefit as determined by total parcel area. Parcels that are directly adjacent to, or in the proximity of, overhead facilities will receive an aesthetic benefit as detailed in the assessment report.
Reliability Benefit:
Utility undergrounding provides enhanced reliability to parcels due to having new wires and equipment underground which reduces the threat of service interruptions or outages City Council Staff Report
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Underground Utility Assessment District No.1
if poles and wires are downed. When compared to overhead systems, fewer outages occur due to various acts of nature, traffic collisions and obstructions, such as trees. All properties that connect to the new underground system receive a reliability benefit. This benefit is based on the average area of the parcels in the District.
Assessments and Costs:
There are 51 assessable parcels in the proposed Old Las Palmas Underground Utility Assessment District No. 1. Proposed individual assessments range from approximately $92,000 to $139,000. Assessments vary due to property size and benefits received.
In addition to the assessments, each property owner who currently receives overhead utility service will be required to hire a contractor to underground the overhead services on their private property. Underground connection costs can vary depending on the terrain, landscaping and hardscaping on the property. This amount is in addition to the assessment amounts.
Schedule:
The Assessment Engineer will mail the Notice of Assessment accompanied by an Assessment Ballot to each affected property owner informing them of their preliminary assessment amounts and the time and place for a public hearing to tally the votes. The ballot also indicates how, when, and to whom the ballots should be returned. Ballots remain sealed until the public hearing and final balloting. All assessment ballots submitted to the City Clerk prior to the close of the public hearing will be tabulated in accordance with Article XIIID, Section 4 of the California Constitution (Proposition 218) and Government Code Section 53753.
A Preliminary Engineer’s Report has been prepared by NV5 and is ready for City Council consideration (Attachment A). Staff recommends City Council adopt the Resolution of Intention to form the district (Attachment B), and the resolution preliminarily approving the Engineer’s Report to commence the process for a public hearing and final balloting by affected property owners (Attachment C). The on-call professional services agreement with NV5 has been included in Attachment D.
ENVIRONMENTAL ASSESSMENT:
On October 22, 2025, City Council found this project exempt from the California Environmental Quality Act (CEQA) pursuant to State CEQA Guidelines Section 15302(d) (California Code of Regulations, title 14, 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 City Council Staff Report
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Underground Utility Assessment District No.1
and Facilities.
FISCAL IMPACT:
No fiscal impact to the City’s General Fund is anticipated. Funding of the Engineer’s Report and balloting has been 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 the Proposed District Bond Issue, the City will reimburse the deposit out of the bond funds.
REVIEWED BY:
Acting City Engineer: Francisco Jaime
Assistant City Manager: Flinn Fagg
City Manager: Teresa Gallavan for Scott Stiles
ATTACHMENTS:
A. Preliminary Assessment Engineer’s Report
B. Resolution No. _____
C Resolution No. _____
D. Professional Services Agreement 25Q085 with NV5, Inc.