HomeMy WebLinkAboutUtility Undergrounding Implementation (Master Plan) Dated 03-22-2018STAFF REPORT
CITY OF PALM DESERT
PUBLIC WORKS DEPARTMENT
MEETING DATE: October 25, 2018
PREPARED BY: Ryan Gayler, Project Manager
REQUEST: Approve and adopt the Utility Undergrounding Implementation
Plan.
Recommendation
By Minute Motion,
1. Approve and adopt the Utility Undergrounding Implementation
Plan, and
2. Authorize staff to issue a request for proposals for the
professional services detailed in the utility undergrounding
implementation plan.
Strategic Plan
The Strategic Plan does not address the undergrounding of utilities within the City.
However, in the City's General Plan the City Council has established a goal that residents
should be encouraged to form assessment districts to finance the undergrounding of
overhead utilities. Another goal stated in the General Plan is that view corridors should
be maintained, which encourages the undergrounding of utilities. Additionally, creating a
utility undergrounding implementation plan was included in the goals set for the City
Manager for 2018.
Background Analysis
At the March 22, 2018 City Council meeting, the Utility Undergrounding Master Plan
(UUMP) was approved and adopted. The UUMP lays out a number of ways that utility
undergrounding can be realized in the City of Palm Desert. The UUMP addresses many
of the challenges to undergrounding overhead utilities within the City. The number of
action items identified in the UUMP is such that a separate Utility Undergrounding
Implementation Plan (UUIP) is required. The focus of the UUIP is to ensure that steps are
identified and taken to meet the goals of the UUMP. The implementation plan will not
create new goals or change the goals already established in the UUMP. It simply distills
the goals into smaller manageable steps and provides a path for realizing the objective
of undergrounding overhead utilities throughout the City.
March 22, 2018 - Staff Report
Approve and Adopt the City of Palm Desert Utility Undergrounding Implementation Plan
Page 2 of 2
The attached UUIP is divided into two major sections based upon who initiates the project.
For utility lines that run along arterial streets or that interfere with the views from parks or
scenic corridors, the City can initiate the undergrounding process because the projects
are deemed to be of general benefit to the City as a whole. The City would then create a
ballot initiative to fund the projects of general benefit by means of a city-wide utility user's
tax, or community facilities district.
The City initiated project will only underground about a third of the overhead utilities in
Palm Desert. The remainder will need to be addressed with resident initiated projects.
Resident initiated projects will require a proponent from a neighborhood to work with the
City gathering support from neighbors to create an assessment district to fund the
undergrounding project.
Approval of this UUIP does not authorize any expenditure of funds, but it does establish
a framework to move forward with implementing the goals of the City Council with regard
to the undergrounding of overhead utilities.
Fiscal Analysis
Approval of the UUIP does not have an immediate fiscal impact. Any expenditures resulting
from this plan will be presented to the City Council for consideration.
LEGAL REVIEW DEPT. REVIEW
Approved as to Form
N/A
FINANCIAL CITY MANAGER
REVIEW
Robert W. Hargreaves Tom Garcia, P.E. 'ianet Moore
City Attorney Director of Public Works Director of Finance
ATTACHMENTS: Utility Undergrounding Implementation Plan
Utility Undergrounding Master Plan
Lauri Aylaian
City Manager
CITY OF PALM DESERT
UTILITY UNDERGROUNDING
IMPLEMENTATION PLAN
A COMPANION DOCUMENT TO THE
UTILITY UNDERGROUNDING MASTER PLAN
October 25, 2018
Introduction
This Utility Undergrounding Implementation Plan (UUIP) is a companion document to the
Utility Undergrounding Master Plan (UUMP) approved by the Palm Desert City Council
on March 22, 2018. The UUIP takes the information and recommendations from the
UUMP and creates an easy -to -follow set of actions to pursue the goal of City-wide utility
undergrounding.
There are two major types of undergrounding projects in the UUMP, those initiated by the
City and those initiated by residents. Accordingly, the UUIP is divided into two sections,
which are outlined as follows:
Citv initiated projects — Rule 20A and Rule 20C
The undergrounding process is essentially the same for both 20A and 20C projects. The
main difference is that Rule 20A projects are financed by funds that are collected and
held by Southern California Edison (SCE) until the City creates an eligible project. Rule
20A eligible projects must meet specific requirements such as undergrounding overhead
utilities on identified corridors, usually along arterial streets or near scenic areas.
SCE assigns a fixed amount to the City's Rule 20A account, and these funds are accrued
over time until sufficient funding is available to pursue a project. The City's current balance
of Rule 20A funds is $794,566, which is sufficient to fund a relatively small project. Once
the Rule 20A funds are fully expended, Rule 20A projects can still be completed, but
without using any more monies from SCE. Rule 20C projects are projects that are fully
funded by the underlying property owner, so any unfunded portion of a Rule 20A project
would be treated the same as a Rule 20C project.
Both Rule 20A and Rule 20C projects are considered to be of general benefit. Therefore,
the City could create a utility user tax or form a city-wide Mello -Roos Community Facilities
District (CFD) to raise the funds to finance the project. Since the CFD would be
designated specifically for undergrounding, this would be considered a special tax
requiring approval by two-thirds of the voters subject to the tax.
The first step in undergrounding for City -initiated projects is to select the areas to include
in the project. There are some locations where it may not make sense to spend the
money on undergrounding the utilities, such as locations where future development will
be required to fund the undergrounding. Staff will make a recommendation on which
areas to include and the City Council will make the ultimate decision.
Next, for areas selected by the City Council, the City will conduct a survey to gauge the
interest of property owners and rate payers. This will enable the City to determine the
residents' level of support for a new tax, and if additional information would assist the
residents in making that determination.
Upon completion of the initial assessments, the City will issue a request for proposals to
contractors, the response to which will determine the estimated cost for residents. A
consultant will evaluate several options for calculating the assessment. If a utility user
tax is chosen, the assessment will be based upon a rate per kilowatt hour. If a CFD is
chosen, the assessment will be based upon square footage, per parcel, or per dwelling
unit. Estimated tax amounts will be calculated based upon all the scenarios.
Once the estimates are available, City staff will reevaluate the project locations to ensure
the undergrounding is practical and economical. If changes are recommended they will
be presented to the City Council for consideration. Once the project locations are
established and the project cost estimate is determined, the consultant will work with staff
and the City Attorney to develop a draft initiative for the ballot. If the voters approve the
ballot measure, the City will coordinate with Southern California Edison to design and
construct the project.
Resident initiated projects — Rule 20B
For residential neighborhoods, the most common way to accomplish utility
undergrounding is for homeowners to form an Assessment District (District). Overhead
utilities that serve neighborhoods make up the largest portion of utilities to be
undergrounded within the City. The City is not allowed to completely finance the
undergrounding in these Rule 20B areas, but with approval of the City Council and City
Attorney, the City can partner financially with the District to encourage resident
participation in the district. The master plan envisions that the bulk of the cost will be
borne by the property owners who benefit from the undergrounding, generally through
assessment districts.
For Rule 20B projects, the first step is to conduct a survey of residents to gauge interest
in the undergrounding process. Because residents will be financing the majority of the
project cost, it is important to identify districts with a high concentration of supportive
participants.
Next, a policy must be established regarding the extent to which the City will financially
participate in the projects. The cost per parcel for undergrounding utilities can easily
exceed $40,000, so assistance from the City can make the project more economically
viable for home owners. Staff will work with the City Attorney to make a recommendation
to the City Council regarding the extent to which the City could financially participate in
projects.
A consultant would be utilized for the public education phase of the program, including
town -hall meetings to provide information regarding participation in undergrounding
projects. Through these meetings it will be possible to explain the process of
undergrounding utilities, from forming an assessment district to constructing the
improvements. Contact information will be collected from residents showing interest in
the process and potential districts would then be drawn up and ranked based upon the
data collected from the meetings.
As districts are formed by residents using the Step -by -Step guide from the UUMP, the
City will coordinate with an assessment engineer and Southern California Edison to
design the project and generate a per -parcel cost for the improvements. The per -parcel
cost is calculated by compiling all the costs associated with the undergrounding project,
including the design and construction costs, and prorated based upon characteristics of
the specific parcels.
The City will contract with a consultant to manage the project from the initial scoping of
the project, to assisting with the voting process for the formation of the assessment
district, and through construction. The consultant will act as the primary contact and will
be responsible for communicating with residents to answer questions and explaining the
process so residents know what to expect during the project.
Utility Undergrounding Implementation Plan
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City -Initiated Projects
Staff / City Council
Select all 20A and 20C projects for Utility User's Tax (UUT) or Community Facilities District (CFD)
6 to 8 weeks
Conduct survey of property owners or rate payers to gauge interest
Create estimate for tax amount using rate and method determined below (factor in 20A credits)
$75,000 - $100,000
3 to 4 months
Consultant
Calculate the rate per kW amount or the rate per property unit (ie. CFD or UUT amount)
Consultant
Estimate amount for single family home for both methods
Consultant
Attempt to purchase Rule 20A credits from other cities
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Staff / City Council
Reevaluate the projects for undergrounding
6 to 8 weeks
Consultant/Staff/City Attorney
Develop draft initiative for the ballot working with City Attorney
Staff/Consultant/SCE
Upon successful ballot measure, work with SCE to complete construction
Timeframe
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Conduct survey of residents to gauge interest
Establish policy regarding City contributions to 20B projects
Contract with a consultant to educate and inform the public (ie. Town hall meetings)
Rank districts based upon information received from the meetings
Contract with an assessment engineer
Work with SCE to design the projects
Contract with an on -call consultant to bid and manage the project
UTILITY UNDERGROUNDING MASTER PLAN
CITY OF PALM DESERT
PALM DESERT
FINAL
CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
Table of Contents
1 SECTION PAGE
1. Executive Summary 2
2. Introduction / Project Approach .9
3. Maps Identifying Area Served by Above Ground Utility Infrastructure 11
4. Identification and Prioritization of Locations Eligible for Rule 20A Funding 16
5. Rule 20B Boundary Maps / 20C Projects 25
6. Rule 20A Credits, Funding Approaches for Rule 20B Projects 54
7. Cost Estimates for Undergrounding 61
1
8. Streamline Assessment District Formation Process - Utility Undergrounding Guide 66
9. Metric for Measuring the City's Annual Investment and Progress for Community Wide
Undergrounding 73
1 APPENDIX 1 75
1
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1. EXECUTIVE SUMMARY
A. BACKGROUND
C!TY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
Since shortly after Palm Desert's incorporation as a city in 1973, new development here has been
required to underground utilities. The poles and wires that crisscross some of the community's older
neighborhoods illustrate that many homes, built prior to incorporation, continue to be served by above
ground utility lines.
Residents in these areas have expressed concern about the safety, aesthetics, and negative impact on
property values caused by above ground utility lines. In response to these concerns, Palm Desert's City
Council in March 2015 approved the formation of an ad hoc Committee to study utility undergrounding in
Palm Desert.
Composed of eight citizen representatives and two City Council members and operating on the premise
that underground utilities are preferable to unsightly above ground lines and poles, the Committee
reached a consensus that the relocation of utility lines below ground should be a municipal priority.
The Committee determined that an early and important step in the process should be the preparation
of an undergrounding master plan. In April 2016, the City Council approved the Committee's
recommendations, adopting the undergrounding of all utility lines in Palm Desert as a goal. The Council
also authorized the hiring of a consultant to create an undergrounding master plan.
The master plan lays out a number of ways that utility undergrounding can occur in Palm Desert. For
neighborhoods, however, the most common way to accomplish utility undergrounding is for neighbors to
form an assessment district.
B. SCOPE OF WORK
Create a utility undergrounding master plan for the City that includes the following elements:
1. A map identifying areas served by above ground utility infrastructure;
2. Identification and prioritization of locations eligible for Rule 20A funding;
3. An outline of potential boundaries for utility undergrounding assessment districts in residential
and commercial areas ineligible for Rule 20A funds that would be logistically and economically
feasible;
4. Research and analysis on a toolbox of funding mechanisms for undergrounding that include 20A
credits, but also addresses other approaches for 208 projects, such as Enhanced Infrastructure
Financing Districts, a utility tax with proceeds dedicated to utility undergrounding, purchasing
Rule 20A credits from other agencies, or other innovative funding methods;
5. Calculations and refined cost estimates for utility undergrounding including updated engineer
estimates to arrive at reliable construction costs for proposed projects;
6. Estimates for the mainline construction, and the costs anticipated for the construction from the
mainline to the panel.
7. Recommendations on ways to simplify and streamline the City's existing assessment district
formation process, including the creation of a Utility undergrounding Guide to be available, at
City Hall and online, to property owners interested in learning more about the process.
8. Identification of a metric for measuring the City's annual investment in and progress toward the
goal of community -wide undergrounding.
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PALM DESERT
C. 20A PROJECTS
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CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
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D. THE FOLLOWING ARE THE CITY'S POTENTIAL RULE 20A PROJECTS WITH SCE COMMENTS:
Country Club Drive
Frank Sinatra 1
Frank Sinatra 2
Gerald Ford Drive
Monterey Ave
Portola Ave
Tamarisk Row
Chia Drive
This qualifies, but very expensive due to transmission circuit plus 2 distribution
circuits
This qualifies, but is very expensive due to transmission voltage
This qualifies and is a nice project due to only one distribution circuit
This qualifies as a Rule 20A, but due to transmission corridor it is typically 2X
as expensive as distribution
This qualifies as a Rule 20A, but due to transmission corridor it is typically
2X as expensive as distribution. Also, 1 don't see the value in including OH
distribution crossing of the RR tracks on the north end of the project, but it
does qualify
This qualifies but is expensive, sections of it are double transmission circuited
plus a distribution circuit. Each transmission line requires its own ducts and
structures. This entire corridor would be 5X as expensive as a typical R2OA.
Also, the section that goes off onto (possibly) private property between
Portola and Frank Sinatra may not qualify and might need to be excluded
This qualifies but very expensive due to transmission circuit
This qualifies, is a nice project and not too expensive
SCE recommends Frank Sinatra 2 to be our highest priority project, then Chia Drive.
For more detail, see pages 17-24.
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E. 20B PROJECTS
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CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
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PALM DESERT
F. RULE 20A CREDITS
CITY OF PALM DESERT
UTILITY UNIT ERGROUNDING MASTER PLAN
Palm Desert's Rule 20A balance is $785,312 with an annual allocation of $72,944. The following is the
criteria for determining Rule 20A funded projects:
1. The undergrounding will avoid or eliminate an unusually heavy concentration of overhead utility
facilities
2. The road or right-of-way occupied by the facilities is extensively used by the general public and
carries a heavy volume of pedestrian or vehicular traffic
3. The road or right-of-way adjoins or passes through a civic area, public recreation area, or an area
of unusual scenic interest
4. The street or road or right-of-way is considered an arterial street or major collector as defined in
the Governor's Office of Planning and Research General Guidelines
Cities can purchase credits outside their immediate area. As an example, Laguna Beach recently
purchased $300,000 in Rule 20A credits from Indian Wells for $165,000. We have seen a range of $.50/
dollar to $.55/dollar to purchase credits from other cities. Buying credits is a very viable approach to assist
in funding Rule 20A projects. It requires finding cities who are interested in selling their 20A credits.
Rule 20A projects can become Rule 20C projects if other funding is found.
Brian Kolka of SCE, told us the following on December 13, 2017, "Rule 20A allocation funding for each
agency is determined by Edison's R20A annual budget. And our budget was cut by 40% for the 2015 Rate
Case and we anticipated that it will be cut another 50% with the 2018 Rate Case."
For more detail, see page 54 and Appendix 1.
RULE 206 FUNDING APPROACHES
Projects that do not qualify for Rule 20A funds and were not completed through property development
are designated as Rule 20B projects. Rule 20B projects have traditionally been funded through the 1913
Act Assessment Districts.
Additional funding mechanisms reviewed include the following:
1. Enhanced Infrastructure Financing Districts (EIFD)
2. Utility User Tax
3. Mello -Roos CFD
4. Utility Surcharge
RULE 20C
Rule 20C projects are projects that don't qualify for Rule 20A credits and do not fit well in Rule 208 type
projects. Rule 20C undergroundings typically are privately funded or a part of a public project. In many
cities, when land is redeveloped, owners are required to relocate the utilities underground, so Rule 20C is
utilized in those situations. Rule 20C is by far the predominate mechanism for undergrounding overhead
utilities in the State of California.
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PALM DESERT
Several of these options are feasible, pros and cons are listed below:
This mechanism was really designed for undeveloped properties that want to
develop to pay for needed infrastructure to support development. Money is
borrowed against the tax increment that is developed from the undeveloped
property value to the developed property value. Since the proposed utility
undergrounding work is proposed primarily on already developed land, the
tax increment captured will be relatively small. This approach does not appear
practicable for undergrounding overhead utilities in Palm Desert.
This is a feasible mechanism to generate funds for undergrounding overhead
utilities. Concerns would be that these are typically enacted City wide and would
include a lot of properties that have their utilities already undergrounded if all
facilities are included. If it is placed on the ballot as a general services usage, it
requires a 50 percent registered voter approval. If it is for a special purpose, like
an undergrounding overhead utilities program, it requires a two-thirds registered
voter approval. A two-thirds registered voter approval is difficult to achieve
particularly when half the City already has utilities that are undergrounded.
This could be a viable option for a City wide vote for 20A and 20C projects not
including 20B projects.
This is a feasible mechanism to generate funds for undergrounding overhead
utilities. A positive attribute is that the CFD could be prepared with 2 zones, one
City wide for non -Rule 20B projects and then another zone for all Rule 20B type
projects. The downside is that it requires a two-thirds voter approval to approve
the CFD. This seems to be a viable option for funding City wide projects, Rule 20A
and Rule 20C.
This may be a feasible mechanism to funding underground projects. It is
recommended that the City not consider proceeding in this manner until final
court rulings have been made for the Cities of Santa Barbara and San Diego.
EIFD
Utility User Tax
Mello -Roos CFD
Utility Surcharge
FINAL
C!TY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
The traditional 1913 Act assessment district is still a viable mechanism but it is often criticized for being a
slow process, costly and property owner drive. The following are suggestions on how to save costs to the
District and time:
1) Form the assessment district before preparing PS&E.
2) Consider having the City bid and manage their undergrounding projects themselves. SCE tacks on
a 42% management fee on all civil work included in the project. As an example, the City of Laguna
Beach has managed their own projects at a considerable savings for thirty (30) years. SCE has no
added management fee for just their work.
3) Consider having all civil work as a separate City project not included in the District.
4) Develop a fund for soft costs and not charge the assessment district such as: Assessment
Engineering, PS&E, Construction Management and Inspection for approved districts.
Currently, the largest amount of time is spent on preparing PS&E. SCE will only allow their staff and select
consultants to prepare PS&E, which usually takes 1.5 to 2.0 years.
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PALM DESERT
FINAL
CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
It is the author of this report's opinion that a really sound approach to funding the undergrounding of
the City's overhead utilities would be twofold as follows:
1) Put in place a utility user tax or property tax (such as a Mello -Roos CFD) to pay for Rule 20A (when
Rule 20A credits are not available) and Rule 20C projects. This would be a City wide tax requiring
two -third voter approval.
2) Continue with Rule 20B projects through assessment districts incorporating recommendations in
this report.
For more detail, see pages 54-60.
G. COST ESTIMATES FOR UNDERGROUNDING
The costs reflected in this utility undergrounding master plan are planning level costs covering a wide
range of factors including, but not limited to, utility type (distribution versus transmission), existing
terrain, soil conditions, distance, depth of road trenching, road resurfacing, construction methods, traffic
control situations, public notifications, service run costs and service entrance reconfiguration costs.
Preliminary budget estimates for construction costs for the underground conversion were quantified
on a linear foot basis with an approximate unit cost of $1,000 per linear foot for distribution lines and
approximately $1,500 per linear foot for transmission lines, which were based on discussions with
Southern California Edison Project Management staff and research of similar utility undergrounding
projects performed by other public agencies within Southern California. Additionally, the cost to convert
overhead service drops to underground varies from $3,000 to $10,000 per property and is based on a
number of factors, including the distance from the mainline to the meter based on the property owner's
home (the longer the distance, the greater the cost for trench excavation, backfill, conduit, pull tape,
fittings, etc.) or whether the contractor is able to bury the line in a trench rather than having to bore
under a driveway, retaining wail, fence, etc. Additional cost factors include ease of access, potential tree
removals, tree trimming, easement or right of way costs. (It should be noted the costs of the underground
conversion of service drops is not reflected in the "total preliminary estimated cost" shown below).
A comparison summary of the Citywide Undergrounding Preliminary Opinion of Probable Costs for the
various Rule 20 projects is provided below in 2017 dollars:
• Rule 20A total preliminary estimated cost = $ 147 million +/-
• Rule 20B tot& preliminary estimated cost = $ 433 million +/-
• Rule 20C total preliminary estimated cost = S 34 million +1-
TOTAL PRELIMINARY ESTIMATE COST= $ 614 million +/-
The breakdown of each total preliminary estimate cost considered the following:
• Construction Cost for Underground Conversion (approximately $1,000 per linear foot for
distribution lines and approximately $1,500 per linear foot for transmission lines)
• General Construction Items of Work (includes, but not limited to, mobilization / demobilization,
traffic control, clearing and grubbing, shoring, trench safety, road trenching and resurfacing. Cost
is approximately 10% of the Construction Cost of Underground Conversion)
• Engineering (Design and/or Assessment) & Construction Management / Inspection fees (cost is
approximately 15% of the Construction Cost of Underground Conversion)
• 30% Contingency (planning level)
For more detail, see pages 61-65.
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CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
H. STREAMLINE ASSESSMENT DISTRICT FORMATION PROCESS -
UTILITY UNDERGROUNDING GUIDE
There are two basic approaches to forming Undergrounding Utility Assessment Districts. One is to prepare
complete plans and specifications and have construction bids in hand before forming the Assessment
District; the other is to form the Assessment District and then prepare plans and specification and then get
construction bids.
Both processes have pros and cons as described below:
Design: Before District Formation
Pro
• Advantage is costs are known before balloting and forming the District
Con
• Plans, specifications and bidding process must be paid for up front before forming the District
• After paying the up front costs, the District could fail to be formed
• It can take two years to have the plans and specifications prepared and construction bids received
and support for the District could change during this period
Design: After District Formation
Pro
• Once the petition is approved, the City can immediately order the Engineer's Report, go to ballot
and form the Assessment District
• Up front costs are significantly less and the time period to form the District is reduced to about 3-4
months
• It is known whether you have an Assessment District before preparing plans and specifications and
obtaining bids
Con
• Disadvantage is the bids could come in higher than the estimated cost in the Engineer's Report
causing a shortfall in assessment funds
For more detail, see pages 66-72.
I. METRIC FOR MEASURING THE CITY'S ANNUAL INVESTMENT AND PROGRESS FOR
COMMUNITY WIDE UNDERGROUNDING
For more detail, see pages 73-74.
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2. INTRODUCTION / PROJECT APPROACH
FINAL
CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
The City of Palm Desert's RFP, dated May 1, 2017 identified the following key elements that needed to be
addressed in the preparation of the Utility Undergrounding Master Plan.
UTILITY RESEARCH & COORDINATION AND GIS MAPPING
Utility coordination is an integral element in the planning and implementation of the Utility
Undergrounding Master Plan. Accurate and complete mapping of the City's 67 miles of above ground
utilities is essential for maintaining the overall project schedule and budget. PENCO's proactive
management of the relationships with the utility providers involved with this project is the key to the
success of this task. PENCO immediately began the utility coordination process via initial utility research
and investigation, developed utility contacts through the utility notification process and performed site
investigations to verify existence and locations of power poles and above ground utilities to confirm the
accuracy of the utility maps we obtained. Additionally, PENCO utilized the information collected from the
utility maps and field visits to build onto the City's and utility owner's Geographical Information System
(GIS) framework as a basis of informing residents and the public community of identifying and locating
the above ground utilities within City limits. The GIS spatially models the location (XYZ, as needed) of
the power poles, wires, guy wires, supports and conduits, risers, above ground distribution transformers
in detail. The resultant GIS represents the integration of above ground utility information previously
only retrievable via field visits and drawers full of detailed drawn underground electric, cable TV and
telephone utility plans into one seamless utility wide map. When viewed in the context of geography, the
City's aboveground utility data is quickly understood by the public, and provides efficient delivery of map
and geographic record information to the public, City staff and other agencies and special interest groups.
RULE 20A
The following criteria has been applied throughout the City of Palm Desert to determine potential Rule
20A funded projects:
1. The undergrounding will avoid or eliminate an unusually heavy concentration of overhead utility
facilities
2. The road or right-of-way occupied by the facilities is extensively used by the general public and
carries a heavy volume of pedestrian or vehicular traffic
3. The road or right-of-way adjoins or passes through a civic area, public recreation area, or an area
of unusual scenic interest
4. The street or road or right-of-way is considered an arterial street or major collector as defined in
the Governor's Office of Planning and Research General Guidelines
A list of projects have been identified by PENCO and Southern California Edison (SCE) has confirmed the
list. The list is attached herein for City staff review.
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PALM DESERT
RULE 20B
FINAL
CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
These are project areas that do not receive Rule 20A funds and have already been developed with over
head utilities and will not be redeveloped in the near future. These potential project areas have been
reviewed and boundaries determined. The state enabling Acts for undergrounding districts were applied
along with Proposition 218 as applicable. All potential boundaries will be reviewed with City staff and
confirmed.
FUNDING MECHANISMS AND STREAMLING THE FORMATION PROCESS
All possible funding mechanisms for Rule 20A & 6 projects will be considered. Those mechanisms will
include the following:
1. Rule 20A credits
2. Purchasing 20A credits from other Cities
3. Enhanced Infrastructure Financing Districts (EIFD)
4. Utility Tax
5. Mello -Roos CFD
6. Utility Surcharge (City of San Diego as an example)
7. Traditional 1913 Act Assessment District with a streamline approach
Each alternative is summarized in this Master Plan Report with a description of pros and cons. All work
has been completed in compliance with the RFP and results are described on the following pages.
Pire10
PALM DESERT
FINAL
CITY OF PALM DESERT
UTfLITY UNDERGROUNDING MASTER PLAN
3. MAPS IDENTIFYING AREA SERVED BY ABOVE GROUND UTILITY
INFRASTRUCTURE
Based on the research conducted during the preparation of this master plan, the City of Palm Desert
encompasses approximately 67 miles of above ground utility lines that traverse arterial, secondary,
collector and local streets. See Figure 1 of an overview map showing the approximate locations of the
above ground utilities within City limits and see Figure 2 for a map depicting the locations of the Rule
20A projects, Rule 20B boundaries and Rule 20C projects. To document and maintain accurate records of
areas served by above ground utility lines, a Geographic Information System (GIS) geodatabase has been
prepared and referenced in the City's ArcGIS network. The following sections describe the methodology
for identifying the master plan study area within the City of Palm Desert, evaluating the data collected via
requests for utility inventory maps, GPS survey and field investigations and a brief description of basis of
the development and contents of the City's GIS geodatabase of the aboveground utilities.
Symbology
— Arterial Streets
Streets
MI Aboveground UNltty Locations
i_..' CityBaundary
Figure 1- Vicinity Map
�010 6COD
r3
I'AI R1 DESERT
NPENCOENG
Aboveground Utility Locations
Vicinity Map
City of Palm Desert
Utility Undergrounding
Master Plan
Page 11
PALM DESERT
FINAL
CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
Figure 2 - Rule 20A, 20B, and 20C Designations
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Rule 20B Boundary Maps
l=1 Rule 20C Projects
— Arterial Streets
Streets
: CityBoundary
a
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fl
PALM DESERT
6.000 KPENCOENG
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City of Palm Desert
Utility Undergrounding
Master Plan
Page 12
FINAL
PALM DESERT
METHODOLOGY
CITY OF PALM DESERT
UTILITY UNIJERGROUNDING MASTER PLAN
The following methodology was adopted in development of an inventory facilities map of the existing
above ground utilities within City limits:
• Research of utility records, including identification of dry utility owners and issuance of letters to
utility agencies requesting facilities inventory maps
• Obtain and digest City's Geographic Information System (GIS)
• Field Data Collection via Global Positioning System (GPS) Survey
• Field Investigation of the above ground utility infrastructure
DATA COLLECTION
In August 2017, City's Public Works (Engineering) DtNdi staff initiated research of utili as
via issuance of letters to the utility agencies, listed in Table 1 below, requesting inventory maps of above
ground facilities. The table also summarizes responses received from the utility agencies from the map
request letter.
Table 1: Utility Contact List
Utility Agency
Type of Utility
Southern
California Edison
(SCE)
• Frontier
Communications
Electric
Telephone
and Fiber
Communications
Utility Contact Info
Facilities Maw;
Map Reque S, Building D
PO Box 11982
Santa Ana, CA 92711-1982
SCE Distribution
Contact: Brian Kolka
Distribution Project Manager
24487 Prielipp Drive
Wildomar, CA 19596
Tel: (951) 249-8596
Brian.Kolka@sce.com
1~optect: Rp$Iree Serrano
Engineer Apprentice
9 5. 4th Street
Redlands, CA 92373
Desiree.serrano@ftr.com
Contact: J. Luis Becerra
OSP Engineering & Network
Engineering
295 N. Sunrise Way
Palm Springs, CA 92262-5295
Tel: (760) 778-3621
luis.becerra@ftr.com
Response to Map Request
Letter
Facilities
present
within City
limits?
Yes
Yes
Facility
Maps
provided to
City?
Pending (as
of Dec 2017)
Yes
Page 13
u
PALM DESERT
AMIr
1
1
1
1
1
1
1
1
1
1
Utility Agency
Charter
Communications
(formerly Time
Warner Cable)
imperial
Irrigation
District
i
Southern
California Gas
- Company
Type of Utility
Cable TV
Water & Power
Gas
- Coachella Valley Water & Sewer
Water District
FINAL
CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
Utility Contact Info
83473 Avenue 45
Indio, CA 92201-7333
Contact C orth of Country Club
Dr): Dmit i Hernandez
Tel: (760T4674-4450
Dmitri.Hernandez@charter.com
Contact (South of Country Club
Dr): Grant Jaeger
Tel: (760) 674-5540
Grant.Jaeger@charter.com
Contact: Marco Bautista
81-600 Avenue 58
La Quinta, CA 92253
Tel: (760) 398-5816
mbautista@iid.com
Contact: Michael Jacob
Technical Services Supervisor
1981 West Lugonia Avenue,
5C8031
Redlands, CA 92374
Contact:Tyler Hull
PO Box 1058
Coachella, CA 92236
Tel: (760) 398-2651
thull@cvwd.org
Response to Map Request
Letter
Facilities
present
within City
limits?
Response
pending
(as of Dec
2017)
Response
pending
(as of Dec
2017)
No
No
Facility
Maps
provided to
City?
N/A
(since no
facilities
present
- within City
limits)
N/A
(since no
facilities
present
within City
limits)
Generally, SCE owns and maintains most of the power poles in the City. SCE operates two different
types of major overhead facilities: namely, distribution and transmission lines. The distribution line
system receives power from the transmission system and makes electricity available at a usable voltage
to smaller areas. The transmission line system provides high voltage services to a large regional area.
Frontier telecommunications service lines were also found on SCE distribution poles, and service the
same parcels as SCE.
Additionally, GIS facility maps were obtained from the City, which contained streets, parcel lines,
boundaries, street centerlines and benchmark monumentation. The City's control network is based upon
California Coordinate System CCS83, Zone 6, 2004 Epoch.
To further develop an accurate depiction of the above ground utility lines, a detailed GPS survey was
performed to geospatially (i.e. collect XYZ coordinates) locate the position of the existing power poles
within City limits. Generally, the power poles were located along the sidewalk / parkways of City streets.
Page 14
16, ,")
PALM DESERT
L
1
t
1
FINAL
CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
However, several power poles were observed to be located in the backyards of resident's homes.
Subsequently, a field investigation was conducted to perform a quality control check of the GPS survey
and to collect the following data:
• Power Pole ID# (designated by SCE)
• Type of Pole (e.g. wood)
• Bearing / direction of above ground utility lines
• Quantity of above ground utility lines (from pole to pole)
• Existence of transformers
• Existence of guy anchors
The data collected from the utility atlas maps, record drawings, GPS survey and field reviews were
digested, further refined and ultimately utilized to generate an inventory database of above ground utility
lines in GIS electronic format.
GEOGRAPHIC INFORMATION SYSTEM (GIS) DATABASE OF ABOVE GROUND UTILITIES
Mapping and data analysis for this master plan utilized ArcGIS Desktop software. ArcGIS Desktop has
a map -making interface where users are able to add several map layers containing geospatial data for
storing, checking and displaying data within a common geographic framework.
The GIS database was compiled using ArcGIS Desktop which uses northing and easting coordinates
gathered through the GPS survey and field review performed, and facility maps obtained of the above
ground utility lines. The visual features that appear on the GIS map are physical power poles and areas
where the wires anchor into the ground (i.e. guy anchors). These features are linked to an attribute table
that has one row per feature that describes other characteristics that are not visually represented on
the map, such as pole owner, direction and number of overhead wires, the presence of a transformer,
and the presence of a cobra head street light on the pole, but pertain to characterizing the power pole.
The data collected for the GIS database also contributed to the delineation of Rule 20A or Rule 20C areas
(organized by street) and Rule 20B areas (organized by assessment districts).
Page 15
FINAL
PALM DESERT
CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
4. IDENTIFICATION AND PRIORITIZATION OF LOCATIONS
ELIGIBLE FOR 20A FUNDING
Rule 20A projects have been determined by using the methodology described in Section 2 and field
review by our project manager.
The Rule 20A projects are depicted on pages 17 through 24. These maps also indicate the linear footage
of power line to be removed and the number of power poles to be removed.
We had SCE, Brian Kolka, review our proposed Rule 20A projects, they concurred with our list and offered
the following comments:
Rule 20A:
Country Club Drive
Frank Sinatra 1
Frank Sinatra 2
Gerald Ford Drive
Monterey Ave
Portola Ave
Tamarisk Row
Chia Drive
This qualifies, but very expensive due to transmission circuit plus 2 distribution
circuits
This qualifies, but is very expensive due to transmission voltage
This qualifies and is a nice project due to only one distribution circuit
This qualifies as a Rule 20A, but due to transmission corridor it is typically 2X
as expensive as distribution
This qualifies as a Rule 20A, but due to transmission corridor it is typically
2X as expensive as distribution. Also, I don't see the value in including OH
distribution crossing of the RR tracks on the north end of the project, but it
does qualify
This qualifies but is expensive, sections of it are double transmission circuited
plus a distribution circuit. Each transmission line requires its own ducts and
structures. This entire corridor would be 5X as expensive as a typical R20A.
Also, the section that goes off onto (possibly) private property between
Portola and Frank Sinatra may not qualify and might need to be excluded
This qualifies but very expensive due to transmission circuit
This qualifies, is a nice project and not too expensive
SCE recommends Frank Sinatra 2 to be our highest priority project, then Chia Drive.
Page 16
PALM DESERT
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FINAL
CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
PALM DESERT
WASHINGTON
Rule 20A
Aboveground Utility Locations
aPENCOENG
Client Success is Our Success
City of Palm Desert
Utility Undergrounding
Master Plan
Page 17
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FINAL
PALM DESERT CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
gm 5. RULE 20B BOUNDARY MAPS / 20C PROJECTS
01.
OWN
Potential Boundaries for Assessment Districts (or Rule 20B projects) have been determined by using the
methodology described in Section 2 and field review by our project manager. Please note that some of
the boundaries may divide into more than one district.
The boundaries are depicted on pages 26 through 47. These maps also list the number of parcels, linear
footage of power line to be removed and the number of power poles to be removed.
In addition, we have added Rule 20C maps. These are projects that don't qualify for Rule 20A credits
and do not fit well in Rule 20B type projects. Actually, Rule 20C is by far the predominate mechanism
for undergrounding overhead utilities in the State of California. Rule 20C undergroundings typically are
privately funded or a part of a public project. They follow the Rule 20B maps on pages 48 through 53.
Page 25
PALM DESERT
r•.
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FINAL
CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
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Cbcrr Success os Our Success
City of Palm Desert
Utility Undergrounding
Master Ran
Page 26
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CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
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Utility Undergrounding
Master Plan
Page 48
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PALM DESERT
FINAL
CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
6. RULE 20A CREDITS, FUNDING APPROACHES FOR RULE 20B
PROJECTS
RULE Z0A CREDITS
Utility Companies will fund and complete Rule 20A projects through the use of Rule 20A credits. Cities
throughout California receive Rule 20A credits on an annual basis and accrue them until they have enough
to complete a project. In Palm Desert's case, as of this writing, the City's balance is $785,312 with an
annual allocation of $72,944. The following is the criteria for determining Rule 20A funded projects:
1. The undergrounding will avoid or eliminate an unusually heavy concentration of overhead utility
facilities
2. The road right-of-way occupied by the facilities is extensively used by the general public and
carries a heavy volume of pedestrian or vehicular traffic
3. The road or right-of-way adjoins or passes through a civic area, public recreation area, or an area
of unusual scenic interest
4. The street or road or right-of-way is considered an arterial street or major collector as defined in
the Governor's Office of Planning and Research General Guidelines
Cities can purchase credits outside their immediate area. As an example, Laguna Beach recently
purchased $300,000 in Rule 20A credits from Indian Wells for $165,000. We have seen a range of $.50/
dollar to $.55/dollar to purchase credits from other cities. Buying credits is a very viable approach to assist
in funding Rule 20A projects. It requires finding cities who are interested in selling their 20A credits.
Rule 20A projects can become Rule 20C projects if other funding is found.
Brian Kolka of SCE, told us the following on December 13, 2017, "Rule 20A allocation funding for each
agency is determined by Edison's R20A annual budget. And our budget was cut by 40% for the 2015 Rate
Case and we anticipated that it will be cut another 50% with the 2018 Rate Case." See Appendix 1 for
SCE's list of Rule 20A credit balances as of December 31, 2015.
RULE 206 FUNDING APPROACHES
These projects are those that do not qualify for Rule 20A funds and were not completed through property
development also known as Rule 20C. Rule 20B projects have traditionally been funded through the 1913
Act Assessment Districts; a streamline approach is described in Section 7.
Other funding mechanisms include the following:
1. Enhanced Infrastructure Financing Districts (EIFD)
2. Utility User Tax
3. Mello -Roos CFD
4. Utility Surcharge (City of San Diego as an example)
Page 54
PALM DESERT
1. Enhanced Infrastructure Financing Districts (EIFD)
FINAL
CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
SB 628 (Beall) authorizes the creation of a new governmental entity called an Enhanced Infrastructure
Financing District (EIFD). One or more of these districts may be created within a city or county and used to
finance the construction or rehabilitation of a wide variety of public infrastructure and private facilities.
An EIFD may fund these facilities and development with the property tax increment of those taxing
agencies (cities, counties, special districts, but not schools) that consent. EIFD's are also authorized to
combine tax increment funding with other permitted funding sources including:
• Property tax revenue distributed to a city, county or special district after payment of a successor
agency's debts
• Revenues dedicated by a city or county to the EIFD from property tax corresponding to the
increase in assessed valuation of taxable property attributed to those property tax shares received
by a city or county pursuant to in lieu of Vehicle License Fees (VLF)
■ Fee or assessment revenues derived from one of 10 specified existing sources
■ Loans from a city, county or special district, that must be repaid at no more than the LAIF interest
rate that is in effect on the date the loan is approved by the governing board of the city, county or
special district making the loan
Facilities financed by an EIFD may include but are not limited to:
Public Infrastructure and Facilities:
• Highways, interchanges, ramps and bridges, arterial street, parking and transit facilities
• Sewage treatment, water reclamation plants and interceptor pipes
• Facilities for the transfer and disposal of solid waste, including transfer stations and vehicles
• Facilities to collect and treat water for urban uses
• Flood control levees and dams, retention basins, and drainage canals
• Parks, recreational facilities, open space and libraries
• Brownfield restoration and other environmental mitigation. A district may use powers of the
Polanco Redevelopment Act to remediate property
• Projects on a closed military base consistent with approved base reuse plans. Funds may also be
used to repay loans made pursuant to Section 67851 to a military base reuse authority on or after
the creation of the district
Private Facilities:
• Acquisition, construction and repair of industrial structures for private use
• Transit priority projects as defined under Section 21155 of the Public Resources Code
• Projects which implement a sustainable communities strategy
• Mixed -income housing developments (An EIFD may fund only those units dedicated to low or
moderate income housing, and child care, after -school care and social services)
Page 55
PALM DESERT
FINAL
CITY OF PALM DESERT
UTILITY UNI7ERGROUNDING MASTER PLAN
-� • Reimbursement of a developer located within the boundaries of a district for permit and other
expenses incurred when constructing affordable housing pursuant to the Transit Priority Project
Program under Section 65470 of the Government Code
• Facilities constructed to house providers of consumer goods and services
• Child care facilities
PROCESS FOR CREATING AN EIFD
SB 628 provides that a city or county that created a redevelopment agency may not create an EIFD or
participate on the PFA until each of the following has occurred:
• The successor agency receives a finding of completion from Department of Finance (DOF)
• The city/county certifies to DOF that no former redevelopment agency assets are the subject of
litigation involving the state, where the city, successor agency or designated local authority are a
named plaintiff, have been or will be used to benefit any efforts on a EIFD until the legal process
has concluded
• The State Controller has completed its review of agency-city/county asset transfers after January
1, 2011, pursuant to section 34167.5; and the successor agency has complied with the findings and
orders of the State Controller stemming from those reviews.
If an EIFD is created within a former redevelopment project area, property tax within the area must first
be used for payment of the successor agency's enforceable obligations. Since the City of Palm Desert had
a redevelopment agency, all of the above provisions would apply.
ADOPTION OF INFRASTRUCTURE FINANCING PLAN
Once any certification associated with the dissolution of a former redevelopment agency is completed,
the initiating city or county may establish one or more districts by resolution. Following that, the city or
county directs the preparation of an infrastructure financing plan that includes the details of the public
facilities and other forms of development that is proposed within the area of the district and how those
facilities and development will be funded.
A variety of funding sources are available. The legislation envisions the main funding source will be
property tax increment generated within the area encompassed by the EIFD. The preparation of an
infrastructure financing plan will include discussions with other taxing entities (county, special districts)
to determine whether they consent to transferring their share of the property tax increment or other
eligible revenue to the EIFD for the purpose of financing facilities and development. Amounts contributed
to the district by other taxing entities need not be the same for all taxing entities. There is flexibility for
amounts contributed to vary and change aver time.
Prior to approving a plan, the legislative body shall hold a public hearing with ample notice provisions
to provide an opportunity for comments from landowners within the district, taxing agencies, and
members of the public. Upon adoption, the plan is transferred to the Public Financing Authority (PFA) for
implementation.
Page 56
FINAL
PALM DESERT
CITY or PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
PROVISIONS AFFECTING ISSUING BONDS, LOAN AND AUDITS
The PFA may issue bonds payable from funds or properties of the district with 55% voter approval of
either voters or landowners within the District. If at least 12 persons are registered to vote within the
District, then the vote is by registered voters. If fewer than 12 persons are registered, then the vote is by
landowners within the District. Each landowner has one vote for each acre or portion of an acre of land
that s/he owns. A public agency is not considered a "landowner" unless all of the land in the district is
owned by the public agency.
A city, county, or special district that contains territory within the District may loan money to the District
to fund the activities described in the Plan at the Local Agency Investment Fund (LAIF) rate of interest in
effect at the time of the loan.
Every two years after the issuance of bonds, the District must contract for an independent financial and
performance audit conducted according to guidelines established by the Controller. A copy of the audit is
provided to the Controller, DOF, and the Joint Legislative Budget Committee.'
2. Utility User Tax
The Utility User Tax (UUT) may be imposed by a city on the consumption of utility services, including (but
not limited to) electricity, gas, water, sewer, telephone (including cell phone and long distance), sanitation
and cable television. A county may levy a UUT on the consumption of electricity, gas, water, sewer,
telephone, telegraph and cable television services in the unincorporated area.
The rate of the tax and the use of its revenues are determined by the local agency. The tax is levied by the
city or county on the consumer of the utility services, collected by the utility as a part of its regular billing
procedure, and then remitted to the city or county.
Most of the cities and counties with UUTs adopted the taxes prior to 1986 by vote of the city council (or in
the case of a county UUT, the county board of supervisors). Any increase or extension of a local tax now
requires voter approval. Statewide, city and county utility user taxes generate nearly $2 billion per year.
Exemptions
State and federal government agencies, and gas and water used by utility companies to generate
electricity are exempt from utility user taxes.
Cities and Counties with UUTs as of 1/1/2017
Cities Counties Total Calif Population
Covered
Total UUTs 157 4 161 54.0%
I Telephone UUTs 149 4 153 49.5%
Electricity 156 4 160 52.7%
I Gas 156 4 160 52.7%
I Cable TV 90 1 91 22.8%
Water 85 1 86 24.7%
I Sewer 14 1 15 2.7%
1 Garbage 12 0 12 1.3%
San Francisco is counted as a county
Page 57
FINAL
PALM DESERT
APPROVAL PROCESS
CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
Proposition 218 requires a utility user tax to be approved by the voters of that jurisdiction. If it is a general
obs tax, it requires a 50% approval and if it is a special tax, it requires a two-thirds approval.'
1 Information obtained from the California League of Cities
2 Information obtained from CaliforniaCityFinance.com
4M
er
3. Mello -Roos CFD
In 1982, the Mello -Roos Community Facilities Act of 1982 (Government Code §53311-53368.3) was
created to provide an alternate method of financing for needed improvements and services.
The Act allows any county, city, special district, school district or joint powers authority to establish a
Mello -Roos Community Facilities District (a "CFD") which allows for financing of public improvements
and services. The services and improvements that Mello -Roos CFDs can finance include streets, sewer
systems and other basic infrastructure, police protection, fire protection, ambulance services, schools,
parks, libraries, museums and other cultural facilities. By law, the CFD is also entitled to recover expenses
needed to form the CFD and administer the annual special taxes and bonded debt.
A CFD is created to finance public improvements and services when no other source of money is available.
CFDs are normally formed in undeveloped areas and are used to build roads and install water and sewer
systems so that new homes or commercial space can be built. CFDs are also used in older areas to finance
new schools or other additions to the community.
A CFD is created by a sponsoring local government agency. The proposed district will include all properties
that will benefit from the improvements to be constructed or the services to be provided. A CFD cannot
be formed without a two-thirds majority vote of residents living within the proposed boundaries. Or, if
there are fewer than 12 residents, the vote is instead conducted of current landowners. In many cases,
that may be a single owner or developer.
Once approved, a Special Tax Lien is placed against each property in the CFD. Property owners then pay
a Special Tax each year. If the project cost is high, municipal bonds will be sold by the CFD to provide the
large amount of money initially needed to build the improvements or fund the services.
A CFD could be formed in zones for undergrounding overhead utilities, one as city wide tax for unfunded
Rule 20A projects and another zone for just neighborhoods that have not yet undergrounded, Rule 20B.
R. Utility surcharge — San Diego
This is a fee on utility bills enacted by a city council without approval of the voters. The local utility
company collects the fees and then transfers the funds to the city. The City of San Diego charges roughly
6 percent of their combined electric and gas bill to customers on their local utility bill. Half of these fees
collected this way go to a utility undergrounding program. The City of San Diego is being sued, the lawsuit
alleges that surcharges are in fact a tax and have been enacted without following the requirement of
Proposition 218.
The City of Santa Barbara has a surcharge at 1 percent and has also been sued. The money collected goes
into the City's general fund. They are being sued for not complying with Proposition 218. An appellate
court ruled against the City of Santa Barbara and the City of Santa Barbara has decided to appeal to the
State Supreme Court.
The City of San Diego's case is supposed to be heard in the summer of 2018.
Page 58
PALM DESERT
Several of these options are feasible, pros and cons are listed below:
This mechanism was really designed for undeveloped properties that want to
develop to pay for needed infrastructure to support development. Money is
borrowed against the tax increment that is developed from the undeveloped
property value to the developed property value. Since the proposed utility
undergrounding work is proposed primarily on already developed land, the
tax increment captured will be relatively small. This approach does not appear
practicable for undergrounding overhead utilities in Palm Desert.
This is a feasible mechanism to generate funds for undergrounding overhead
utilities. Concerns would be that these are typically enacted City wide and would
include a lot of properties that have their utilities already undergrounded if all
facilities are included. If it is placed on the ballot as a general services usage, it
requires a 50 percent registered voter approval. If it is for a special purpose, like
an undergrounding overhead utilities program, it requires a two-thirds registered
voter approval. A two-thirds registered voter approval is difficult to achieve
particularly when half the City already has utilities that are undergrounded.
This could be a viable option for a City wide vote for 20A and 20C projects not
including 20B projects.
This is a feasible mechanism to generate funds for undergrounding overhead
utilities. A positive attribute is that the CFD could be prepared with 2 zones, one
City wide for non -Rule 20B projects and then another zone for all Rule 20B type
projects. The downside is that it requires a two-thirds voter approval to approve
the CFD. This seems to be a viable option for funding City wide projects, Rule 20A
and Rule 20C.
This may be a feasible mechanism to funding underground projects. It is
recommended that the City not consider proceeding in this manner until final
court rulings have been made for the Cities of Santa Barbara and San Diego.
ElFD
Utility User Tax
Mello -Roos CFD
Utility Surcharge
FINAL
CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
The traditional 1913 Act assessment district is still a viable mechanism but it is often criticized for being a
slow process, costly and property owner drive. The following are suggestions on how to save costs to the
District and time:
1) Form the assessment district before preparing PS&E
2) Consider having the City bid and manage their undergrounding projects themselves. SCE tacks on
a 42% management fee on all civil work included in the project. As an example, the City of Laguna
Beach has managed their own projects at a considerable savings for thirty (30) years. SCE has no
added management fee for just their work.
3) Consider having all civil work as a separate City project not included in the District.
4) Develop a fund for soft costs and not charge the assessment district such as: Assessment
Engineering, PS&E, Construction Management and Inspection for approved districts.
Currently, the largest amount of time is spent on preparing PS&E. SCE will only allow their staff and select
consultants to prepare PS&E, which usually takes 1.5 to 2.0 years.
Page 59
r)
PALM DESERT
FINAL
CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
5. Recommended Funding Approach
It is the author of this report's opinion that a really sound approach to funding the undergrounding of the
City's overhead utilities would be twofold as follows:
1) Put in place a utility user tax or property tax (such as a Mello -Roos CFD) to pay for Rule 20A (when
Rule 2OA credits are not available) and Rule 2OC projects. This would be a City wide tax requiring
two -third voter approval.
2) Continue with Rule 208 projects through assessment districts incorporating recommendations in
this report.
Page 60
1
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1
PALM DESERT
FINAL
CITY OF PALM DESERT
UTILITY UNDERGROUNOING MASTER PLAN
ira 7, COST ESTIMATES FOR UNDERGRGUNDING
The costs reflected in this utility undergrounding master plan are planning level costs covering a wide
range of factors including, but not limited to, utility type (distribution versus transmission), existing
terrain, soil conditions, distance, depth of road trenching, road resurfacing, construction methods, traffic
control situations, public notifications, service run costs and service entrance reconfiguration costs.
Preliminary budget estimates for construction costs for the underground conversion were quantified
on a linear foot basis with an approximate unit cost of $1,000 per linear foot for distribution lines and
approximately $1,500 per linear foot for transmission lines, which were based on discussions with
Southern California Edison Project Management staff and research of similar utility undergrounding
projects performed by other public agencies within Southern California. Additionally, the cost to convert
overhead service drops to underground varies from $3,000 to $10,000 per property and is based on a
number of factors, including the distance from the mainline to the meter based on the property owner's
home (the longer the distance, the greater the cost for trench excavation, backfill, conduit, pull tape,
fittings, etc.) or whether the contractor is able to bury the line in a trench rather than having to bore
under a driveway, retaining wall, fence, etc. Additional cost factors include ease of access, potential tree
removals, tree trimming, easement or right of way costs. (It should be noted the costs of the underground
conversion of service drops is not reflected in the "total preliminary estimated cost" shown below).
A comparison summary of the Citywide Undergrounding Preliminary Opinion of Probable Costs for the
various Rule 20 projects is provided in Table 2 on the next page and summarized below:
• Rule 20A total preliminary estimated cost = $ 147 million +/-
• Rule 20B total preliminary estimated cost = $ 433 million +/-
• Rule 20C total preliminary estimated cost = $ 34 million +1-
TOTAL PRELIMINARY ESTIMATE COST= $ 614 million +/-
Furthermore, a detailed cost breakdown pertaining to each Rule 20 type is provided in Tables 3 through 5,
i.e. Rule 20A (see Table 3), Rule 20B (see Table 4), and Rule 20C (see Table 5) on pages 64-66. Rule 20A and
Rule 20C costs are detailed per street and the lengths of above ground utility lines on each street were
quantified based on the maps compiled from the GPS survey, field review, and facility maps of overhead
utilities. Rule 20B above ground utility lines were sum -based areas based on the twenty-one (21)
assessment districts. The estimated unit costs reflected in Tables 2 through 5 are based on 2017 dollars.
The breakdown of each total preliminary estimate cost considered the following:
• Construction Cost for Underground Conversion (approximately $1,000 per linear foot for
distribution lines and approximately $1,500 per linear foot for transmission lines)
• General Construction Items of Work (includes, but not limited to, mobilization / demobilization,
traffic control, clearing and grubbing, shoring, trench safety, road trenching and resurfacing. Cost
is approximately 10% of the Construction Cost of Underground Conversion)
• Engineering (Design and/or Assessment) & Construction Management / Inspection fees (cost is
approximately 15% of the Construction Cost of Underground Conversion)
• 30% Contingency (planning level)
The total estimated cost per foot to underground the above ground utilities is recommended to be
updated periodically by amendment to this master plan to account for changes in the anticipated inflation
costs of utility construction. Therefore, it is recommended that the funding programs established for
implementation of the Master Plan make provisions for the increased cost of deferred construction.
inflation factors should be applied to reflect a specific year's total cost over the 2017 total costs.
1
Page 61
Table 2 -Citywide Undergrounding Preliminary Opinion of Probable Costs
I'ALM DESERT
0
0
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$ 147.355,000
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$ 113,350,000
$ 433,127,500
$ 33.876,700
$ 614,359,200
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$ 22,660,000
$ 37,988,000
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❑
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C
40 ❑ C
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Table 4- Rule 20B Citywide Undergrounding Preliminary Opinion of Probable Costs
Total Cost 0$)
3
vs
$ 15,973,750
$ 12,287,500
c ❑
;,"7 t
04=I dN
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^ -1
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$ 3,835,000
$ 2,950,000
0
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$ 8,775,000
❑ 0
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m N CO
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0000
0000
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❑1 N N N
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$ 36,887,500
$ 28,375,000
$ 35,230,000
$ 8,130,000
$ 27,100,000
$ 6,857,500
$ 1,582,500
$ 5,275,000
$ 16,461,250
$ 3,798,750
$ 3,997,500
❑
N
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$ 2,270,000
❑ ❑ ❑ ❑ ❑
❑ ❑ ❑ ❑ ❑
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❑ ❑ ❑ ❑ ❑
m In ❑ ❑ ❑
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$ 2,168,000
$ 21,680,000
00
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$ 4,220,000
$ 10,130,000
$ 22,652,500
$ 5,227,500
$ 17,425,000
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n COnv o o rti
m m cv a N 1( o
in in in IVIL
$ 14,163,750
$ 47,212,500
$ 1,365,000
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$ 13,940,000
$ 37,770,000
0
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m
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$ 38,850,000
$ 4,662,000
$ 3,108,000
$ 31,080,000
$ 12,700,000
$ 3,125,000
$ 24,245,000
$ 5,595,000
$ 18,650,000
$ 11,521,250
$ 2,658,750
$ 8,862,500
0000
0000
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$ 1,016,000
$ 10,160,000
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$ 2,500,000
$ 14,920,000
$ 97,597,500
$ 75,075,000
$ 9,009,000
$ 6,006,000
$ 433,127,500
$ 333,175,000
$ 39,981,000
$ 26,654,000
0 0
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o d o
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m to ❑ ❑ ❑ CO N en ID v n a In ❑ In co to o N rn m
co m ❑ v N t0 N r-1 01 N tD r+ m •-+ ❑ ' N 01 0 ❑ LR
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1) As a very preliminary budget estimate, the construction cost of undergrounding the above ground utility fines is approximately $1,000 per linear foot
Table 5 - Rule 20C Citywide Undergrounding Preliminary Opinion of Probable Costs
Total Cost ($)
in
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$ 5,500,000
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OCOTILLO DR
ui m
rl
SOUTH OF HOVELY LN W
RR ROW - INTERSTATE 10 NO.1
RR ROW - INTERSTATE 10 NO.2
$ 26,059,000
$ 3,399,000
$ 2,266,000
$ 22,660,000
0
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FINAL
PALM DESERT
CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
8. STREAMLINE ASSESSMENT DISTRICT FORMATION PROCESS -
UTILITY UNDERGROUNDING GUIDE
There are two basic approaches to forming Undergrounding Utility Assessment Districts. One is to
prepare complete plans and specifications and have construction bids in hand before forming the
Assessment District; the other is to form the Assessment District and then prepare plans and specification
and then get construction bids. Both processes are described on the next four pages, Design: Before
District Formation and Design: After District Formation.
Both processes have pros and cons as described below:
Design: Before District Formation
Pro
• Advantage is costs are known before balloting and forming the District
Con
■ Plans, specifications and bidding process must be paid for up front before forming the District
■ After paying the up front costs, the District could fail to be formed
• It can take two years to have the plans and specifications prepared and construction bids received
and support for the District could change during this period
Design: After District Formation
Pro
• Once the petition is approved, the City can immediately order the Engineer's Report, go to ballot
and form the Assessment District
• Up front costs are significantly less and the time period to form the District is reduced to about
3-4 months
• It is known whether you have an Assessment District before preparing plans and specifications
and obtaining bids
Con
• Disadvantage is the bids could come in higher than the estimated cost in the Engineer's Report
causing a shortfall in assessment funds
The City could employ both procedures allowing the proponents to help decide which method to utilize
after explaining the pros and cons of each process.
Page 66
1
PALM DESERT
FINAL
CITY ❑F PALM DESERT
UTILITY UNEERGROUNDING MASTER PLAN
PALM DESERT
Utility Undergrounding - A Step by Step Guide
Information:
City of Palm Desert
Public Works Department
760-776-6393
rgayler@cityofpalmdesert.org
Page 67
FINAL
PALM DESERT
PALM DESERT
CITY OF PALM DESERT
UTILITY UNDERGROUND1NG MASTER PLAN
City of Palm Desert
Utility Undergrounding - Step -By -Step Guide
Utility Undergrounding - A Step -by -Step Guide
History
Since shortly after Palm Desert's incorporation as a city in 1973, new
development here has been required to underground utilities. The
poles and wires that crisscross some of the community's older
neighborhoods illustrate that many homes, built prior to incorporation,
continue to be served by above ground utility lines.
Residents in these areas have expressed concern about the safety,
aesthetics, and negative impact on property values caused by above
ground utility lines. In response to these concerns, Palm Desert's City
Council in March 2015 approved the formation of an ad hoc Committee
to study utility undergrounding in Palm Desert.
Composed of eight citizen representatives and two City Council
members and operating on the premise that underground utilities are
preferable to unsightly above ground lines and poles, the Committee
reached a consensus that the relocation of utility lines below ground
should be a municipal priority.
The Committee determined that an early and important step in the
process should be the preparation of an undergrounding master plan. In
April 2016, the City Council approved the Committee's
recommendations, adopting the undergrounding of all utility lines in
Palrn Desert as a goal. The Council also authorized the hiring of a
consultant to create an undergrounding master plan.
The master plan lays out a number of ways that utility undergrounding
can occur in Palrn Desert. For neighborhoods, however, the most
common way to accomplish utility undergrounding is for neighbors to
form an assessment district.
Two options for this multi -step, multi -year process a r e explained
below including the standard process and a fast track option designed
to speed the process when there is broad neighborhood support.
Page i
Page 68
FINAL
PALM DESERT
PALM DESERT
CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
City of Palm Desert
Utility Undergrounding - Step -By -Step Guide
Option One — Fast Track
Assessment District Formation
1. The process is initiated by an interested property owner, who acts as a
liaison between the City, utility companies, and neighbors. The property
owners who support undergrounding submit a letter to the City's
Public Works Department expressing their interest in forming an
Underground Utility Assessment District. The letter should include a
description of the proposed boundaries of the area to be
undergrounded.
2. Based on the interest letter, City staff prepares a boundary map and
submits it to the appropriate utility companies who review the map to
ensure that the boundaries are logical and feasible. Once the district
boundaries are accepted by all parties, the utility companies provide
the City with a prelirninary cost estimate for the design and
construction of the undergrounding project.
3. The City then prepares a petition to be circulated by proponents to
all affected property owners within the proposed district boundaries.
The petition states the approximate amount that each property owner
would pay if the property owners vote to form the district to
accomplish the undergrounding project. In order for the process to
continue, at least 70 percent of the property owners must sign and
express support. This petition is a "show of support" and nonbinding.
The City is neutral regarding City -owned parcels within the District.
4. Once the petition is certified by the Assessment Engineer, Public
Works will prepare a staff report requesting City Council approval to
move forward. With Council approval, the Assessment Engineer will
prepare an Engineer's Report. This report documents the assessment
that each property owner within the district would pay, should the
district be approved. This report uses the preliminary estimated
construction costs provided by the utility companies. If the district is
formed, funds expended by the City on costs related to formation of the
district will be recovered during the assessment process. If the district
fails, the City's funds will be lost.
5. The Engineer's Report and Resolution of Intention are submitted to
the City Council for approval and a public hearing is scheduled.
6. The Ballots are prepared with the assessment amount and sent to
each property owner within the proposed district boundaries. Each
property owner then votes for or against the formation of the district.
Each vote is weighted or valued based upon the dollar value of each
property owner's proposed assessment.
Page 2
Page 69
FINAL
PALM DESERT
13
PALM DESERT
CITY OF PALM DESERT
UTILITY UNDERGRO JNDING MASTER PLAN
City of Palm Desert
Utility Undergrounding - Step -By -Step Guide
7, All votes must be submitted to the City prior to the end of the
scheduled public hearing. The district passes if the district received
greater than 50%a approval. If the district passes, all property owners
within the district will be responsible far the assessment amounts
regardless of a property owner's personal vote.
Following approval by the property owners, the detailed design process
begins. It usually involves the following steps:
a. Base mapping
b. Southern California Edison electrical design
c. Telephone and cable design
The duration of each step varies depending on the number of
underground districts in the queue, the size of the proposed district, and
the complexity of the design. This phase could take more than two years
to complete.
Once the project is fully designed, it will be bid with a contract awarded,
and then constructed.
Option Two — Traditional Method
1. The process is initiated by an interested property owner, who acts as a
liaison between the City, utility companies, and neighbors. The property
owners who support undergrounding submit a letter to the City's Public
Works Department expressing their interest in forming an Underground
Utility Assessment District. The letter should include a description of the
proposed boundaries of the area to be undergrounded.
2. Based on the interest letter, City staff prepares a boundary map and
submits it to the appropriate utility companies who review the map to
ensure that the boundaries are logical and feasible. Once the district
boundaries are accepted by all parties, the utility companies provide the
City with a preliminary cost estimate for the design and construction of
the undergrounding project.
3. The City then prepares a petition to be circulated by proponents to
all affected property owners within the proposed district boundaries.
The petition states the approximate amount that each property owner
would pay if the property owners vote to form the district to
accomplish the undergrounding project. In order for the process to
continue, at least 70 percent of the property owners must sign and
express support. This petition is a "show of support" and nonbinding.
The City is neutral regarding City -owned parcels within the District.
4. Once the petition is certified by the Assessment Engineer, Public
Works will prepare a staff report requesting City Council approval for
funds for design of the undergrounding project to be advanced from the
Page 3
Page 70
;'
PALM DESERT
r.�
PALM DESERT
Mr
Olso
w
10411
alba
=r
MIOT
r.r
rf
FINAL
CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
City of Poim Desert
Utility U nderground i ng - Step -By -Step Guide
City's General Fund. If the district is formed, the advanced funds will be
recovered during the assessment process. If the district fails, the funds
will be lost.
5. The design process begins once the utility companies receive the
design fee. The process usually involves the following steps:
a. Base mapping
b. Southern California Edison electrical design
c. Telephone and cable design
The duration of each step varies depending on the number of
underground districts in the queue, the size of the proposed district, and
the complexity of the design.
6. Once the design is complete and accepted by the City and utility
companies, the utility companies provide a "guaranteed cost of
construction." The Assessment Engineer will use this guaranteed cost and
all other costs incurred in the past and anticipated in the future to
generate the Engineer's Report. This report documents the assessment
amount that each property owner within the district would be
responsible for if the district is successful.
7. The completed design plans, Engineer's Report, and Resolution of
Intention are submitted to the City Council for approval and a public
hearing is scheduled. An informal property owner meeting is held prior to
the public hearing to explain the details of the proposed district.
8. Ballots are prepared with the assessment amount and sent to each
property owner within the proposed district's boundaries. Each owner
votes for or against forming the district. Each vote is weighted based on
the dollar value of each property owner's proposed assessment.
9. All votes must be submitted to the City prior to the end of the
scheduled public hearing. The district passes if the district received
greater than 50% approval. If the district passes, all property owners
within the district will be responsible for the assessment amounts
regardless of a property owner's personal vote.
FINAL
611
MIR
oft
•
1
1
1
1
1
1
1
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1
l
PALM DESERT
r3
PALM DESERT
CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
City a/ Palm Desert
Utility Undergrounding • Step -By -Step Guide
Paying the Assessment and Final Steps
Regardless of whether a neighborhood chooses the standard or fast track
method of assessment district formation, the property owners will have
two options to pay for the assessment.
1. 30-Day Cash Payment Period: Within 30 days after the close of the
public hearing, the property owner has the option to pay the full or a
portion of the assessment amount. The property owner will save
approximately 8% an the portion of the assessment paid in cash. This 8%
savings results from not selling bonds for the amount owed. Bonds will
be sold for any unpaid portion of the assessment and a lien will be placed
on the property until the bond is paid in full.
2. Bond: If the property owner elects to not pay during the 30-Day Cash
Payment Period, bonds will be sold. Assessments will be placed on the
property tax bill to be paid over a 20 to 25-year financing period. During
that time, a lien will be placed on the property until the bond amount is
paid in full. Bonds will incur a finance charge.
When construction of the main line underground infrastructure has been
completed, all property owners will be notified that it is time to perform
their private conversions.
Private conversions require property owners to hire a licensed electrician
to connect the property's existing overhead connection to the
underground infrastructure. The cost of the private conversion is not
covered in the assessment amount. The assessment amount only covers
work performed in the public right-of-way.
It is the property owner's responsibility to perform the conversion within
the designated time frame. Delays caused by one property owner's
private conversion, will cause delays to the whole district because
overhead structures cannot be removed until all properties have
completed their private conversions.
It is important to note that, from the initial letter to the last private
conversion, the average process takes approximately seven years,
depending on the size of district. The bond financing period information
provided above is based on an average of past assessment districts and
varies depending on current rates and the district's size.
For more information, please contact the City's Public Works Department
at 760-776-6393.
Page 5
Page 72
f3
PALM DESERT
FINAL
CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
9. METRIC FOR MEASURING THE CITY'S ANNUAL INVESTMENT
AND PROGRESS FOR COMMUNITY WIDE UNDERGROUNDING
12018 12019 1 2020 , 2021 1 2022 1 2023 ' 2024 1 2025 12026 1 2027 12028
Rule 20A
COUNTRY CLUB DR
FRANK SINATRA DR NO. 1
FRANK SINATRA DR NO. 2
GERALD FORD DR
MONTEREY AVE
PO RTO LA AVE
TAMARISK ROW DR
CHIA DR
+
+
+
+
Rule 206
AD 1
AD 2
AD 3
AD 4
AD 5
AD 6
AD 7
AD 8
AD 9
AD 10
AD 11
AD 12
AD 13
AD 14
AD 15
AD 16
AD 17
AD 18
AD 19
AD 20
AD 21
Rule 20C
DINAH SHORE DR
HAYSTACK DR
OCOTILLO DR
SOUTH OF HOVELY LN W
RR ROW - INTERSTATE 10 NO 1
RR ROW - INTERSTATE 10 NO 2
Project Planning
+
+
Project Financing - Project Design
Project Construction
Page 73
0
Not Started
nIn Progress n Done
FINAL
CITY OF PALM DESERT
PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
In addition, the following sample bar graph shows progress in a more macro view.
Cost to be
completed
($) in Millions
500 —
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Each year, on January 1, both charts can be upgraded and progress tracked.
■ Rule 20A
■ Rule 20B
■ Rule 20C
Page 74
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1
1
1
1
t
r
1
1
t
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1
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11
PALM DESERT
APPENDIX 1
FINAL
CITY OF PALM DESERT
UTILITY UNDERGROUNDING MASTER PLAN
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Page 75
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PALM DESERT
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1161 r1�
APPENDIX 1
California Public
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1 11
PALM DESERT
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APPENDIX 1
California Public
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Page 77