City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Administrative Services
Meeting Date: June 2, 2025
Report #:2503-4438
TITLE
Approval of and Authorization of City Manager or their Designee to Execute an Exchange Agreement with Midpeninsula Regional Open Space District for Replacement of Overhead Utility Facilities with Underground Facilities and Exchange and Transfer Real Property Interests within Monte Bello Open Space Preserve and Rancho San Antonio Open Space Preserve, Assessor’s Parcel Numbers 351-25-014, 351-06-025, 351-09-002, and 351-12-069; CEQA Status – Exempt Under CEQA Guidelines Section 15302
RECOMMENDATION
Staff recommends that Council:
1. Approve and authorize the City Manager or their designee to execute the Exchange Agreement and License Agreement;
2. Approve and authorize the City Manager or their designee to execute the Underground Utility Easement and Quitclaim Deed following the completion of the undergrounding project; and
3. Authorize the City Manager or their designee to execute necessary amendments, notices, approvals, or documents relating to the above agreements.
BACKGROUND
Devastating California wildfires have prompted electric utilities throughout the state to identify areas within their jurisdiction that are susceptible to power-line ignited wildfires and to take steps to prevent their occurrence. Utilities Department Project # EL-210011 proposes to rebuild the approximately 11 miles of overhead line to mitigate the possibility of a wildfire due to overhead electric lines. This includes converting the overhead lines to underground along Montebello Road within property owned by the Midpeninsula Regional Open Space District at 1 City of Palo Alto Fiscal Year 2026 Proposed Capital Budget, Pages 424 – 426, https://www.paloalto.gov/files/assets/public/v/1/administrative-services/city-budgets/fy-2026-city- budget/proposed/fy-2026-proposed-capital-budget-book.pdf
Monte Bello Open Space Preserve and Rancho San Antonio Open Space Preserve (Attachment A – Exhibit A).
ANALYSIS
The City holds right-of-way and utility easements for electric distribution lines across Monte Bello Open Space Preserve and Rancho San Antonio Open Space Preserve (Attachment A – Exhibit B). To permit undergrounding of the utilities, the City and District desire to enter into an Exchange Agreement (Attachment A) to exchange and transfer interest in the existing utility easements to a new Underground Utility Easement. The included license agreement (Attachment A – Exhibit F) will allow the city to continue undergrounding powerlines for the Foothills Fire Mitigation project in accordance with the City Alignment Plans (Attachment A – Exhibit C). The term of the license is up to December 31, 2025, but can be extended if the project is not yet complete. Following the District’s acceptance of the completed undergrounding project, the parties will execute an underground utility easement granted from the District to the City (Attachment A – Exhibit D) and the City will quitclaim its interest in the existing overhead utility easements (Attachment A – Exhibit E).
FISCAL/RESOURCE IMPACT
There is no fiscal/resource impact to enter into these agreements. The City will pay the cost of preparing the legal description and plat map for the agreement from the current year Electric Fund. The wildfire mitigation project is funded under both the existing FY2025 CIP budget as well as proposed CIP funding for FY2026. The combined project budget, spanning FY2024 through FY2026 is expected to reach $15.1 million.
STAKEHOLDER ENGAGEMENT
This item has been coordinated internally with the Utilities Department, City Attorney’s Office, and Administrative Services Department, and externally with Midpeninsula Regional Open Space District staff. The Midpeninsula Regional Open Space District Board of Directors unanimously approved of these agreements on May 14, 2025.
ENVIRONMENTAL REVIEW
A CEQA Notice of Exemption was filed with the Santa Clara County Recorder on November 26, 2024 (Attachment B – CEQA Notice). Council action on this item is not a project as defined by CEQA because the undergrounding of existing overhead utility lines is a replacement of an existing structure located on the same site with the same purpose. CEQA Guidelines section 15302.
ATTACHMENTS
Attachment A: Exchange Agreement Between City of Palo Alto and Midpeninsula Regional Open Space District
Attachment B: CEQA Notice
APPROVED BY:
Lauren Lai, Administrative Services Director