The URL can be used to link to this page

Home My WebLink About1997-07-07 City Council (31)City City of Palo Manager’s Report TO:HONORABLE CITY COUNCIL FROM :CITY MANAGER DEPARTMENT: UTILITIES AGENDA DATE: SUBJECT: July 7, 1997 CMR:319:97 UNDERGROUND DISTRICT NO. 36 PROPERTY OWNERS WHO ELECT TO PAY UNDERGROUND CONVERSION COSTS OVER A PERIOD OF YEARS RECOMMENDATIONS Staff recommends that Council approve and authorize the Mayor to execute the attached Resolution determining properties electing to pay costs over a period of years, determining and classifying unpaid assessments, and funding loans to property owners from the Reserve for Underground Connections. POLICY IMPLICATIONS This recommendation does not represent any change to existing policies. EXECUTIVE SUMMARY At the meeting of June 26; 1995, Council adopted Ordinance No. 4280 creating Underground Utility District No. 36 in the Commercial/Industrial/Transport area (Corporation Way, East Bayshore, Fabian Way, East Charleston and San Antonio Road). The Ordinance provided notice that any property owner located within the District had the option of paying the cost of service conversion over a period of ten years, with interest. A total of 15 of the 110 property owners in the District selected the deferred payment plan. This report was prepared in order to proceed with assessment of the 15 properties and the funding of the deferred costs of the Underground District No. 36. The underground project is a general benefit underground district with the City paying all costs except the individual property underground service conversions. CMR:319:97 Page 1 of 2 The conversion costs of the 15 property owners who have chosen the deferred payment plan total $66,462. The remaining property owners chose to be responsible for their own financial arrangements. Assessments will be secured by liens on each property for the ten-year term of the loan. Repayment to the City will be made through the owner’s property tax bills. Interest rates were established at the week preceding adoption of the Ordinance forming the underground district. Using this rate guideline, as mandated in the Palo Alto Municipal Code, the interest rate for the loans will be 6.57 percent. A $50.00 loan processing fee is added to each assessment. FISCAL IMPACT On August 21, 1984, Council approved the funding of individual electric connections from the Electric System Improvement Reserve, thereby establishing the Reserve for Underground Connections. As of June 30, 1996, the balance in the Reserve for Underground Connections was $568,023. ENVIRONMENTAL ASSESSMENT This project is categorically exempt from the requirements of the California Environmental Quality Act and does not require an environmental assessment. ATTACHMENTS. Resolution Property Owner List PREPARED BY: Gopal Jagannath, Patrick Valath, Tomm Marshall DEPARTMENT HEAD APPROVAL: EDWd,ARD J. NClRIZEK Director of Utilities CITY MANAGER APPROVAL: HARRISON Assistant City Manager CMR:319:97 Page 2 of 2 RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO DETERMINING PROPERTIES ELECTING TO PAY COST OVER A PERIOD OF YEARS, DETERMINING AND CLASSIFYING UNPAID ASSESSMENTS, AND FUNDING LOANSTO PROPERTY OWNERS FROM THE ELECTRIC RESERVE FORUNDERGROUND CONNECTIONS UNDERGROUND UTILITIES CONVERSION UNDERGROUND ~TILITY ASSESSMENT DISTRICT 36 The Council of the City of Palo Alto does RESOLVE as follows: SECTION i. The Council of the City of Palo Alto amended Section 12.16.020 of Chapter 12.16 of Title 12 of the Palo Alto Municipal Code by establishing Underground Utility District No. 36 on June 23, 1995, by adopting Ordinance No. 4280. SECTION 2. The owners of certain properties have exercised the option offered in said Ordinance and in Section 12.16.092 of said Code, to pay the cost over a period of years with such obligation secured by special assessments.. A list of the properties owned by persons who have exercised the option to pay the costs of converting their electric service connection to underground locations over the period of ten (i0) years as indicated thereon is attached hereto as Exhibit "A" and hereby made a part hereof. SECTION 3. It appears to this Council that in its proceed- ings under and pursuant to Resolution of Intention to form said District, being Resolution No. 7487, adopted on March 13, 1995, the assessments proposed to be levied should be made to mature over a period of ten (i0) years. SECTION 4~ The public convenience and necessity required that the proceedings heretofore taken with respect to said underground utility districts being changed and modified to provide that the rate of interest to be paid by said owners of said properties shall be three quarters of one percent (3/4 of 1%) in excess of the rate shown in the New York Bond Buyer Index of Municipal Bond Average Yields for 20 bonds for the week next preceding the day on which the Underground Districts were formed. SECTION 5. The assessments now remaining unpaid are as shown on Exhibit "A" attached hereto and by this reference made a part hereof, and that the aggregate amount thereof is $66,462. This Council hereby determines that the owners of the properties shown on Exhibit "A" hereto have elected to pay the cost of converting electric service connections to underground locations over the period of ten (i0) years and that said costs shall represent the unpaid assessments in these proceedings. 970627 syn 0071193 SECTION 6. The City shall advance all loans to assessed property owners from available funds, and shall succeed to all rights under the assessment and to all rights which would have accrued if bonds had been issued as provided in Section 13.04.170(i) of Chapter 13.04 of Title 13 of the Palo Alto Municipal Code. Loans for the Underground District will be funded to the assessed property owners from the Electric Reserve for Underground Connections. The total estimated principal amount to be funded by this Reserve will be $66,462 pending any changes in actual moneys loaned. The principal plus interest and loan processing fee shall be amortized and repaid through the owner’s property taxes for a period of ten (i0) years. The loans shall bear interest from the latest of the date of completion and energizing of underground electrical facilities, or the date of disbursement of the loan. The rate of interest will be 6.57 percent. Principal payments will be refunded to the Reserve for Underground Service Connections and interest will be added to the Electric Rate Stabilization Reserve. SECTION 7. A fee of $50 is added to the principal amount of each loan for loan processing. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST:APPROVED: City Clerk APPROVED AS TO FORM: Senior Asst. City Attorney Mayor City Manager Director of Utilities Acting Director of Administrative Services 970627 syn 0071193 UNDERGROUND UTILITY DISTRICT #36 COMMERCIAL/TRANSPORT/INDUSTRIAL & CORPORATION WAY Property Owner(s) Juliana Valente Juliana Valente August T. & Mary J. Vierra, Tr. August T. & Mary J. Vierra, Tr. August T. & Mary J. Vierra, Tr. Laurence J. Valente Leon H. Przybyla, Jr., Tr., et al Thor O. & Mary A. Jensen, Tr. FATCO % F.A. Moore Charles A. Waltz Diana West Moller Richard & Catherine Papapietro Gregory H. and Margo C. Deane, Tr. Gerard G. & Marguerite Canabou Parcel No.Address 127-15-012 127-15-013 127-15-042 Assessment Principal 127-15-043 4062 Fabian Way $7,500 4074 Fabian Way 9,000 799 San Antonio 3,666 127-15-044 797 San Antonio 3,456 127-15-050 147-01-013 795 San Antonio 1,707 147-01-025 809 San Antonio 4030-4032 Transport 147-01-032 147-01-033 147-01-038 147-01-043 3,500 5,136 147-01-079 4075 Transport 4,498 147-01-098 918 Industrial 8,152 Page 1 of 2 892 Commercial 2,592 916 Commercial 3,835 950-952 Commercial 4,415 949-951 Industrial 2,777 897 Commercial 3,784 U.G.Dist. #36 - Cont. Property Owner(s) Edward A. McJunkin, Jr., Tr., et al Parcel No. 147-01-119 Address 998 San Antonio Assessment Principal 2,444 $ 66,462 Page 2 of 2 fo FW~. LEGEND "---- " "-----BOUNDAR Y OF PROPOSED UNDER OR 0 UND DISTR ENGR. Ix,tANAGER ]oa~v~ PD [ C~ECKEO PF UNDERGROUND DISTRICT h’O. 36 BOUNDAR Y MAP CITY OF PALO ALTO CALIFORNIA IREV DATE i SCALE I V,’ORK O[~OER 1":500’2f203 DESCRIPTION DRAWING 86-BB{-b-u