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Home My WebLink AboutPDCC Undergrounding - Defer the Balloting for ADPALM DESERT REDEVELOPMENT AGENCY STAFF REPORT REQUEST: APPROVE THE RECOMMENDATION BY THE CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 IN RELATION TO THE PALM DESERT COUNTRY CLUB UNDERGROUNDING PROJECT TO DEFER THE BALLOTING FOR AN ASSESMENT DISTRICT UNTIL A FAVORABLE PETITION REPRESENTING 70 PERCENT OF THE ASSESSEES IN THE PROPOSED UNDERGROUNDING DISTRICT IS TENDERED TO THE CITY SUBMITTED BY: Catherine Walker, Senior Management Analyst DATE: May 27, 2010 Recommendation By Minute Motion: Approve the recommendation by the Citizens' Advisory Committee for Project Area No. 4 in relation to the Palm Desert Country Club Undergrounding Project to defer the balloting for an assessment district until a favorable petition representing 70 percent of the assesses in the proposed undergrounding district is tendered to the City. Background The proposed Palm Desert Country Club (PDCC) Utility Undergrounding District was first identified for funding in the Project Area No. 4 bond issuances of 2001 and 2006. The two bond issuances allocated up to $14,000,000 for purposes of neighborhood and arterial undergrounding. Of that amount $688,633 has been spent on engineering design fees, construction estimation services, and assessment district formation for the proposed Palm Desert Country Club Undergrounding Project. In February 2008, the Agency Board authorized payment of deposits to Southern California Edison, Verizon Communications, and MuniFinancial (now known as Willdan) for the purpose of providing engineering cost estimates in association with the PDCC undergrounding. Subsequently, the Agency Board approved funding allocations to Time Warner for design services and additional funding to Willdan for construction estimation. Prior to February 2008, the Agency was only able to estimate the potential cost of the undergrounding by analyzing previous undergrounding project budgets. The procurement of the utility engineering estimates and a construction estimate allowed for Willdan to properly develop the parameters of the assessment, and in turn provide PDCC residents with an accurate estimate of the assessment for each parcel. Staff Report PDCC Undergrounding Project May 27, 2010 Page 2 of 3 Willdan Financial Services has completed the draft of the Preliminary Engineer's Report. The Agency will use the draft report for the purpose of educating effected residents, and distributing an estimate to each property owner in the proposed district. Further in the process, a finalized Engineer's Report will be brought forward for City acceptance and approvals should the community wish to proceed. Representatives from Willdan presented an overview of the draft report to the Citizens' Advisory Committee for Project Area No. 4. They explained the legal parameters for the formation of an assessment district, methodology used in the report, and provided estimates of the resident's assessments based on zoning of the district. The Agency's participation in the amount of $12 million will offset the cost of the improvements performed in the public right-of-way. The Agency's contribution is based upon a historic 40 percent to 50 percent participation by the Agency in undergrounding assessment districts within the City. The initial Total Cost of Undergrounding was estimated to be approximately $24 million, and the Agency's participation was based off that cost. Public Improvements $15,391,752 Private Improvements $ 4,910,100 Cost of Issuance $ 208,200 Underwriter's Discount (1.5%) $ 151,514 Capitalized Interest (6.5%) $ 429,290 Bond Reserve $ 1,010,095 Total Cost of Underqroundinq $ 22,100,951 RDA Contribution ($12,000,000) Total $10,100,951 Estimated Public Assessment + Private Assessment Sinale- Familv Residence Category 1 (w/meter/panel) $8,939 Category 1 (no meter/panel) $6,737 Category 2 (meter/panel installation only) $5,268 Estimated Annual Assessment (30 yr @ 8.5%) Sinale- Familv Residence Category 1 (w/meter/panel) $882 Category 1 (no meter/panel) $677 Category 2 (meter/panel installation only) $540 Staff recommends approval of the recommendation made by the Citizen's Advisory Committee for Project Area No. 4 to defer balloting so that staff can hold a number of outreach forums for the community, and provide an explanation of the assessment along with its methodology. G:\rda\Cathy Walker\Word Data\STAFF REPORTS\Staff PDCC Undergrounding.doc Staff Report PDCC Undergrounding Project May 27, 2010 Page 3 of 3 Once the outreach effort is complete, the effected residents must participate in a petition process. The petition process will require a 70 percent in favor of the project on the petition in order to move forward with the formation of the assessment district. If 70 percent favorable vote is not received from the residents, staff will return to the Agency Board with a recommendation to defer the project. If the 70 percent favorable vote is received, the formal process of the assessment district formation will proceed with the final balloting scheduled to take place at a time to maximize participation by the property owners. Fiscal Analvsis The impact of the Palm Desert Country Club Undergrounding Project cannot yet be accurately determined, and is contingent upon approval of the assessment district. However, $688,633 has been expended on design fees, construction estimation services, and consultant services in relation to the formation of the assessment district. The proposed Agency participation in the amount of $12 million would be in addition to these expenditures. Submitted By: Catherine Walker, Sr. Management Analyst Department Head: Jy 50 McCarthy, ACM r e velopment Paul S. Gibson, Director of Finance Approval: 1 John ohlmuth, Executive Director martin Alvarez, Rede lopment Manager X-A�t BY RDA ON VERIFIED BY Original on file wish City Clerk's Office * By Minute Motion: 1) Schedule the balloting in November 2010; 2) direct staff to help educate the residents on the process; 3) eliminate the 70% Preliminary Petition requirement. 44=0 (Ferguson ABSENT) GArda\Cathy Walker\Word Data\STAFF REPORTS\Staff PDCC Undergrounding.doc