City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: OCTOBER 11, 2022 FROM: COMMUNITY & ECONOMIC DEVELOPMENT WARD: 3
DEPARTMENT
SUBJECT: DECLARE A PORTION OF ASSESSOR’S PARCEL NUMBER 189-100-006 AS EXEMPT SURPLUS LAND; APPROVE THE PURCHASE & SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS WITH SOUTHERN CALIFORNIA EDISON FOR CITY-OWNED LAND THAT INCLUDES THE SALE OF A PORTION OF ASSESSOR’S PARCEL NUMBER 189-100-006 AND TWO INGRESS AND EGRESS EASEMENTS ON PORTIONS OF ASSESSOR’S PARCEL NUMBERS 189-100-006 189-090-002 & -010; AND APPROVE A COST SHARING AGREEMENT FOR THE RIVERSIDE TRANSMISSION RELIABILITY PROJECT, TOTAL REVENUE OF $5,215,000 ISSUE:
Declare as exempt a portion of Assessor’s Parcel Number 189-100-006 (8.76 acres), approve the Purchase & Sale Agreement and Joint Escrow Instructions with Southern California Edison for City-owned land that includes the sale of a portion of Assessor’s Parcel Number 189-100-006 and two ingress and egress easements on portions of Assessor’s Parcel Numbers 189-100-006 (0.60 acres) and 189-090-002 & -010 (0.66 acres); and approve a Cost Sharing Agreement for the Riverside Transmission Reliability Project, total revenue of $5,215,000.
RECOMMENDATIONS:
That the City Council:
Declare a portion of vacant City-owned land bearing APN 189-100-006 as exempt surplus land; Approve the Purchase & Sale Agreement and Joint Escrow Instructions with Southern California Edison for:
A portion of City-owned land (Assessor’s Parcel Number 189-100-006) Two easements (portions of Assessor’s Parcel Numbers 189-100-006 & 189-090-002 & -010) Approve the Cost Sharing Agreement with South California Edison for the Riverside Transmission Reliability Project; Authorize the City Manager, or his designee, to execute the Purchase & Sale Agreement and Joint Escrow Instructions, including making minor and non-substantive changes, and to sign all documents necessary to complete the transaction; and Authorize the City Manager, or his designee, to execute the Cost Sharing Agreement with South California Edison for the Riverside Transmission Reliability Project, including making minor and non-substantive changes, and to sign all documents necessary.
BOARD RECOMMENDATION:
On September 26, 2022, the Board of Public Utilities considered 1) a recommendation that City Council approve the Purchase & Sale Agreement and Joint Escrow Instructions with Southern California Edison for 8.76 acres, a portion of Assessor’s Parcel Number (APN) 189-100-006, and 2) Cost Sharing Agreement for the Riverside Transmission Reliability Project.
Based on the Board of Public Utilities recommendation, City Council may consider the item at the October 11, 2022, City Council meeting.
BACKGROUND:
The Riverside Transmission Reliability Project (RTRP Project) is a joint project with Southern California Edison (SCE) and Riverside Public Utilities (RPU). The RTRP Project will provide RPU with a critical second connection to the state electric transmission grid to address the long-term capacity and reliability needs of the City’s electric utility system. The RTRP Project includes construction of approximately nine miles of double circuit 230kV transmission lines, installation of approximately 10 miles of 69kN sub-transmission lines within Riverside, construction of two new substations – Wildlife (SCE) and Wilderness (RPU), improvements to five existing RPU 69kVsubstations, reconfiguration of existing distribution lines and installation of new telecommunication lines.
In November 2004, the Board of Public Utilities (Board) authorized RPU to enter an agreement with SCE to complete a System Impact Study and a Facilities Study. The results of these studies were received in June and October of 2005. They indicated the need to construct a double-circuited 220kV transmission line into the city of Riverside and a 220-66 kV transmission substation.
In March 2009, the City and SCE entered into a Letter Agreement which provided the terms and conditions for SCE to begin the engineering, design and preparation of specifications for the SCE interconnection facilities. The Agreement required the City to sell to SCE the land essential for the wildlife substation.
On February 5, 2013, the City Council certified the Final Environmental Impact Report (FEIR) for the RTRP Project, in accordance with California Environmental Quality Act (CEQA) requirements. A Notice of Determination was filed with the County of Riverside following the certification by the City Council.
On March 12, 2020, SCE obtained California Public Utilities Commission (CPUC) approval of RTRP and was granted a Certificate of Public Convenience and Necessity (CPCN).
On August 24, 2020, the Board recommended that the City Council approve a supplemental appropriation of $125,000,000 to Account No. 6130000-470685 to be funded from the Electric Fund (Fund 510) for Riverside Transmission Reliability Project. The supplemental appropriation funded: the construction of two new substations, including the Wilderness Substation for RPU and the Wildlife Substation for SCE, improvements to five existing substations, reconfiguration of the existing distribution lines, and installation of new telecommunication lines. City Council approved this item on January 26, 2021.
DISCUSSION:
Since the 1970s, the City has owned the property for the proposed Wilderness Substation site near the northeasterly corner of Wilderness Avenue and Ed Perkic Street. SCE’s 230kV interconnection switchyard will be constructed adjacent to the proposed substation at the site.
The RTRP project will divide RPU’s electric system into two sections: East (Vista Source #1) and West (Wildlife Source #2) subsystems. The East subsystem will be served from SCE’s existing Vista Substation and the West System will be served from the proposed Wildlife Substation. Both subsystems can be operated in parallel under emergency conditions to meet the reliability goals when there is a loss of one of the SCE sources.
The proposed SCE 230kV Wildlife Substation would be constructed on the land near the northeast corner of Wilderness Avenue and Ed Perkic Street. This area is within the city limits. Upon the approval of the Purchase & Sale Agreement and Joint Escrow Instruction, the proposed substation would connect to the SCE system, via the anticipated double-circuit 230kV transmission line, to the proposed Wilderness Substation. Per the agreement, the City will provide SCE with two easements for ingress and egress on the adjacent City-owned parcels to allow access to the substation.
Aerial View of the Property
Pursuant to Government Code 54235(a)(1) “if a local agency, as of September 30, 2019, has entered into an exclusive negotiating agreement of legally binding agreement to dispose of property, the provisions of the article as it existed on December 31, 2019, shall apply , without regard to the changes made to this article by Chapter 664 of the Statutes of 2019, and all subsequent amendments to this article, to the disposition of the property to the party that had entered into such agreement or its successors or assigns, provided the disposition is completed not later than December 31, 2022.” In this case, the subject property is encumbered by the Interconnection Facilities Agreement between the City and SCE dated March 9, 2009. Section 13.1 states, “SCE will purchase the land associated with the Wildlife Substation that is currently owned by Riverside and Riverside shall sell to SCE the land required for the Wildlife Substation that it owns as determined during design to be necessary in connection with the initial operation of the Wildlife Substation to provide for appropriate space and access right for future gateway requirements, installation, operations, maintenance, replacement and removal of SCE required facilities including, but not limited to, facilities required for station light and power and other SCE facilities, at a price equal to the fair marker value of the land as determined by a licensed appraiser.” An independent third-party appraiser provided an appraisal which concluded to a value of $5,215,000 in its as-is condition. Staff reviewed the report and determined that the sale price of $5,215,000 for the subject property represents the current fair market value. SCE accepted the appraised value for the subject property and the terms of the Purchase & Sale Agreement and Joint Escrow Instructions.
Certain project components, including, but not limited to site grading, site access, and street improvements overlap between RPU and SCE due to the interdependent nature of RTRP scope of work. Both parties will collaborate and coordinate on these project components. RPU and SCE have agreed that RPU, as a public agency, will take the lead on the common work and share the cost in accordance with an agreed Cost Sharing Agreement (CSA), to efficiently complete the common work, which will benefit both parties.
Using the CSA allows RPU and SCE to maintain compete control over overlapping/collaborative work while also benefiting from shared operating expenditures, improved efficiency, and reduced potential change orders during construction.
STRATEGIC PLAN ALIGNMENT:
This item contributes to Strategic Priority No. 6 – Infrastructure, Mobility & Connectivity, specifically Goal 6.2 – Maintain, protect and improve assets and infrastructure within the City’s built environment to ensure and enhance reliability, resiliency, sustainability and facilitate connectivity.
This item aligns with each of the five Cross-Cutting Threads as follows:
Community Trust – The City is actively engaged with the Riverside Transmission Reliability Project (RTRP) and is informing policymakers on potential actions that may be taken to protect and serve the public interest.
Equity – The City supports racial, ethnic, religious, sexual orientation, identity, geographic, and other attributes of diversity and is committed to advancing the fairness of treatment, recognition of rights, and equitable distribution of services to ensure every member of the community has equal access to share in the benefits of RTRP.
Fiscal Responsibility – The City is a prudent steward of public funds and ensures responsible management of the City’s financial resources while providing quality public services to all. RTRP, designed and approved, has been found to be the most economical and fiscally responsible method for project delivery to Riverside customers. The land for the SCE substation was appraised by a third party to ensure that the City and rate payers are receiving fair market value.
Innovation – The City is inventive and timely in meeting the community’s changing needs and prepares for the future through this collaborative partnership with RTRP and being aware of the need for the interconnection with the state electric transmission grid to respond to and prepare for any potential impacts on the community.
Sustainability & Resiliency – The City is committed to meeting the needs of the present without compromising the needs of the future and ensuring the City’s capacity to persevere, adapt and grow during good and difficult times alike. The need for RTRP was derived from the need for a reliable supply of electricity. The lack of sufficient electric delivery capability created a risk to the resiliency of the city which were addressed by RTRP.
FISCAL IMPACT:
The subject property is City-owned and is being sold for $5,215,000 less all title, escrow, and miscellaneous related closing costs for a total not to exceed $ 20,000. The estimated net proceeds from the sale in the amount of $5,195,000 shall be deposited into the Sale of Land and Buildings Account No. 0000510-380010.
Prepared by: Chris Christopoulos, Acting Director
Community & Economic Development Director
Certified as to
availability of funds: Edward Enriquez, Interim Assistant City Manager/Chief Financial Officer/City Treasurer
Approved by: Rafael Guzman, Assistant City Manager
Approved as to form: Phaedra A. Norton, City Attorney
Attachments:
Purchase & Sale Agreement and Joint Escrow Instructions Legal Descriptions and Plat Maps
Cost Sharing Agreement
(G:)/Real_Property/Document/Ward 3/2022/22-3-021-Wildlife Substation -CC Memo Declare APN 189-100-006 Surplus Land, RTRP SCE wildlife Land Sale Agreement ● Page 2