HomeMy WebLinkAboutStaff Report 346-09TO: HONORABLE CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT: UTILITIES
DATE: AUGUST 3, 2009 CMR: 346:09
REPORT TYPE: CONSENT
SUBJECT: Approval of a Utilities Electric Fund Contract with West Valley
Construction in the Amount of $3,193,143 for Trenching and
Installation of Utility Substructure for Underground Utility District
No. 45, and for Rebuilding of Underground Districts 17, 19, & 24
(Capital Improvement Program Projects -EL-06002, EL-09003, EL-
B008, and EL-I0006), and Approval of Addendum No.1 to the
Agreement for .Joint Participation in the Installation of the
Underground Facilities System Between the City of Palo Alto, AT&T
and Comcast Corporation of California IX, Inc.
RECOMMENDATION
Staff recommends that Council:
I. Approve and authorize the City Manager or his designee to execute the attached contract
with West Valley Construction in the amount of$3,193,143 for trenching and installation
of the utility substructure system for the Underground Utility District No. 45 (UUD 45),
17(UUD 17), 19 (UUD 19), &24 (UUD 24) Projects. Districts 17, 19, and 24 are
electric district system rebuild projects.
2. Authorize the City Manager or his designee to negotiate and execute one or more change
orders to the contract with West Valley Construction for related, additional but
unforeseen work which may develop during the project, the total value of which shall not
exceed $319,314 or approximately 10% of the contract value.
3. Approve and authorize the City Manager or designee to execute the attached Specific
Supplementary Agreement for Joint Participation Installation of Underground Facilities
System between the City of Palo Alto, AT&T California and Comcast Corporation of
California IX, Inc.
CMR: 346:09 Page 1 of 4
BACKGROUND
At its meeting on May 5, 2008, the City Council adopted Ordinance No. 5003 creating
Underground Utility District No. 45 (CMR 220:08, Attachment F). This project involves
constructing an underground electric distribution system in an area that meets both City and
AT&T guidelines for undergrounding. The new underground system (reference Attachment E,
Project Boundary Maps) is to be installed in the public right-of-way and constructed in four
phases:
Phase I Substructure installation by the contractor, consisting of trenching
and placement of conduits, vaults, boxes and pads in the public
right-of-way and in public utility easements.
Phase II Installation, testing and energizing of new underground distribution
cables, switches and transformers.
Phase III Customer service conversions -all affected property owners will be
required to connect to the new underground system.
Phase IV Removal of all overhead lines and poles.
In addition, in order to maximize economies of scale and minimize disruption downtown, the
rebuilds of UUD 17, 19, and 24 require separate Phase I substructure modifications and
installations, which have been coordinated to occur at the same time as UUD 45. The existing
UUDs were built in the 70s and early 80s and are near the end of their design lives and are
approved for rebuild as part of the 2009/2010 Capital Improvement Program.
The attached contract is for Phase I of the projects for all four UUDs. This work needs to be
performed by a contractor because the City does not have the staff and the equipment to install
the substructure required for this project.
DISCUSSION
Summary of Bid Process
sed Length of Project
Number of Bids Mailed
Contractors
Under round District No.45, 17, 19, & 24
3 months -Phase I
to 26
Number of Bids Mailed to Builder's 5
Exchanges ~------------------~------------------------------------------~ Total Days to R~spond to Bid 23
e-Bid Meeting Yes
umber of Company Attendees at 17
Pre-Bid Meeting
Number of Bids Received: 6*
Bid Price From a low of$3,193,143 to a hi h of $4,430,610
*Bid summary provided in Attachment B.
CMR: 346:09 Page 2 of4
Staff has reviewed all bids submitted and recommends that the bid of $3,193,143 submitted by
West Valley be accepted and that West Valley be declared the lowest responsible bidder. The bid
is eight percent below the engineer's estimate of $3,500,000, which was based on construction
costs for similar work in previous projects. The change order amount of$319,143, which equals
10% percent of the total contract, is requested for related unforeseen work, which may develop
during the project.
Staff confirmed with the Contractor's State License Board that the selected contractor has an
active license on file. Staff checked references supplied by the contractor for previous work
performed and found no significant complaints.
Joint Agreement
To take advantage of the economics of joint use of trenches, the City, AT&T California and
Comcast Corporation executed a Master Agreement in 2008 (originally a master agreement between
City and Pacific Bell executed in 1975, amended in 1986 and again in 1990) for participation in
joint underground construction projects. This agreement is primarily a cost sharing agreement for
undergrounding overhead lines, which is applicable to the UUD 45 portion of this contract.
The Master Agreement limits the undergrounding expenditures to $85,000 per project. Whenever
the amount involved in a project exceeds the $85,000 limit, as this one does, an Addenda to this
Master Agreement is required. The Addenda, which is a Specific Agreement, references the Master
Agreement for general terms and conditions and requires, when the work is contracted, the use of
the exact unit prices quoted by the contractor to determine the costs shared between the utilities.
Accordingly, the City, who will administer the contract for this project, will invoice AT&T
California and Comcast Corporation on the basis of prices quoted and the terms agreed upon in
Exhibit "A" of the Specific Agreement. Staff recommends approval of the Specific Agreement for
the Underground Utility District # 45.
Project Coordination
The undergrounding work was coordinated with the Public Works Department street paving
program. Since the start of this project staff has been in frequent communication with the
property owners directly affected by this project via letters and neighborhood meetings.
Additional details of Phase I construction performed under this contract will be communicated
to the neighborhoods and other affected project stakeholders in advance of the construction, and
every effort will be made to minimize inconvenience to customers.
RESOURCE IMPACT
Funds for this project are included in the FY 2009-2010 Electric Capital Improvement Program
Budgets EL-06002, EL-09003, 11008, and EL-10006. Based on the low bid, the estimated
costs for the City, AT&T and Comcast are $2,253,143, $440,000 and $500,000 respectively.
POLICY IMPLICATIONS
This project supports CPAU Key Strategy number 7 -Implement programs that improve the
quality of the environment and Supporting Objective number 2 -Invest in utility infrastructure to
deliver reliable service.
CMR: 346:09 Page 3 of4
ENVIRONMENTAL REVIEW
This project is categorically exempt from the California Environmental Quality Act (CEQA)
under CEQA Guidelines Section 15 302( d) (conversion of overhead electric utility facilities to
underground).
ATTACHMENTS
A: Contract
B: Bid Summary
C: Certificate of Non-Discrimination
D: Addendum 1 -Specific Agreement for Joint Participation Installation of Underground
Facilities System in UDD 45
E: Project Boundary Maps
F. CMR 2208:08 -Adoption of an Ordinance Amending Section 12.16.020 of Chapter 12.16 of
Title 12 of the Palo Alto Municipal Code by Establishing Underground Utility District No.
45 (Palo Alto Avenue, Alma Street, High Street, Lytton Avenue and Cambridge Avenue)
PREPARED BY: JAMES S. BUJTOR
Senior Electric Project Engineer
REVIEWED BY:
Assistant Director, Utilities Engineering
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
J
City Manager
CMR: 346:09 Page 4 of4
CONTRACT No. C10131437
(Public work)
Utilities Department
ATTACHMENT A
This Contract, number C10131437 dated ___ is entered into by and between the City of Palo Alto, a California
Charter City and a municipal corporation of the State of California ("City") , and West Valley Construction Company, Inc.
("Contractor").
For and in consideration of the covenants, terms, and conditions (*the provisions*) of this Contract, City and Contractor
("the parties") agree:
1. Term. This Contract shall commence and be binding on the parties on the Date of Execution of this Contract,
and shall expire on the date of recordation of the Notice of Substantial Completion, or, if no such notice is
required to be filed, on the date that final payment is made hereunder, subject to the earlier termination of this
Contract.
2. General Scope of Project and Work. Contractor shall furnish labor, services, materials and equipment in
connection with the construction of the Project and complete the Work in accordance with the covenants, terms
and conditions of this Contract to the satisfaction of City. The Project and Work is generally described as
follows:
Title of Project: Underground District 45,17,19 & 24, Invitation for Bids (IFB) No. 131437
Bid: § 3,193,143
3. Contract Documents. This Contract shall consist ofthe documents set forth below, which are on file with the City
Clerk and are hereby incorporated by reference. For the purposes of construing, interpreting and resolving
inconsistencies between and among the provisions of this Contract, these documents and the provisions thereof
are set forth in the following descending order of precedence.
a. This Contract.
b. Invitation for Bid.
c. Project SpeCifications.
d. Drawings.
e. Change Orders.
f. Bid.
g. Supplementary Conditions.
h. General Conditions.
I. City of Palo Alto Dept. of Public Works Standard Drawings and Specifications (2007).
j. Certificate of Insurance, Performance Surety Bond, Labor & Materials (Payment) Surety Bond.
k. Other SpeCifications, or part thereof, not expressly incorporated in the Contract Specifications or the
City of Palo Alto Dept. of Public Works Standard Drawings and SpeCifications (2007).
I. Any other document not expressly mentioned herein which is issued by City or entered into by the
parties.
4. Compensation. In consideration of Contractor's performance of its obligations hereunder, City shall pay to
Contractor the amount set forth in Contractor's Bid in accordance with the provisions of this Contract and upon
the receipt of written invoices and all necessary supporting documentation within the time set forth in the
Contract Specifications and the City of Palo Alto Dept. of Public Works Standard Drawings and SpeCifications
(1992), or, if no time is stated, within thirty (30) Days of the date of receipt of Contractor's invoices.
5. Insurance. On or before the Date of Execution, Contractor shall obtain and maintain the policies of insurance
coverage described in the Invitation For Bid on terms and conditions and in amounts as may be required by the
Risk Manager. City shall not be obligated to take out insurance on Contractor's personal property or the
personal property of any person performing labor or services or supplying materials or equipment under the
Project. Contractor shall furnish City with the certificates of insurance and with original endorsements affecting
coverage required under this Contract on or before the Date of Execution. The certificates and endorsements for
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each insurance policy shall be signed by a person who is authorized by that insurer to bind coverage in its behalf.
Proof of insurance shall be mailed to the Project Managertothe address set forth in Section 16 of this Contract.
6. Indemnification. Contractor agrees to protect, defend, indemnify and hold City, its Council members, officers,
employees, agents and representatives harmless from and against any and all claims, demands, liabilities,
losses, damages, costs, expenses, liens, penalties, suits, or judgments, arising, in whole or in part, directly or
indirectly, at any time from any injury to or death of persons or damage to property as a result of the willful acts or
the negligent acts or omissions of Contractor, or which results from Contractor's noncompliance with any Law
respecting the condition, use, occupation or safety of the Project site, or any part thereof, or which arises from
Contractor's failure to do anything required under this Contract or for doing anything which Contractor is required
not to do under this 'Contract, or which arises from conduct for which any Law may impose strict liability on
Contractor in the performance of or failure to perform the provisions of this Contract, except as may arise from
the sole willful acts or negligent acts or omissions of City or any of its Council members, officers, employees,
agents or representatives. This indemnification shall extend to any and all claims, demands, or liens made or
filed by reason of any work performed by Contractor under this Contract at any time during the term of this
Contract, or arising thereafter.
To the extent Contractor will use hazardous materials in connection with the execution of its obligations under
this Contract, Contractor further expressly agrees to protect, indemnify, hold harmless and defend City, its City
Council members, officers and employees from and against any and.all claims, demands, liabilities, losses,
damages, costs, expenses, liens, penalties, suits, or judgments City may incur, ariSing, in whole or in part, in
connection with or as a result of Contractor's willful acts or negligent acts or omissions under this Contract, under
the Comprehensive Environmental Response. Compensation and Liability Act (42 U.S.C. 'H9601-6975, as
amended); the Resource Conservation and Recovery Act (42 U.S.C. :n6901-6992k, as amended); the Toxic
Substances Control Act (15 U.S.C. :n2601-2692, as amended); the Carpenter-Presley-Tanner Hazardous
Substance Account Act (Health & Safety Code, 3325300-25395, as amended); the Hazardous Waste Control
Law (Health & Safety Code, 3325100-25250.25, as amended); the Safe Drinking Water and Toxic Enforcement
Act (Health & Safety Code, 3325249.5-25249.13, as amended); the Underground Storage of Hazardous
Substances Act (Health & Safety Code, 3325280-25299.7, as amended); or under any other local, state or
federal law, statute or ordinance, or at common law.
7. Assumption of Risk. Contractor agrees to voluntarily assume any and all risk of loss, damage, or injury to the
property of Contractor which may occur in, on, or about the Project site at any time and in any manner, excepting
such loss, injury, or damage as may be caused by the sole willful act or negligent act or omission of City or any
of its Council members, officers, employees, agents or representatives.
8. Waiver. The acceptance of any payment or performance, or any part thereof, shall not operate as a waiver by
City of its rights under this Contract. A waiver by City of any breach of any part or provision of this Contract by
Contractor shall not operate as a waiver or continuing waiver of any subsequent breach of the same or any other
provision, nor shall any custom or practice which may arise between the parties in the administration of any part
or provision of this Contract be construed to waive or to lessen the right of City to insist upon the performance of
Contractor in strict compliance with the covenants, terms and conditions of this Contract.
9. No Exoneration Bv Inspection: The City has the right, but not the duty, to inspect Contractor's Work. The right of
inspection is solely for the benefit of City. Contractor has the obligation to complete the Work in a satisfactory
manner in compliance with Contract requirements. The presence of a City inspector does not shift that obligation
to the City or relieve Contractor from its obligations to complete the Work in a satisfactory manner in compliance
with the Contract requirements.
10. Compliance with Laws. Contractor shall comply with all Laws now in force or which may hereafter be in force
pertaining to the Project and Work and this Contract, with the requirement of any bid security or fire underwriters
or other similar body now or hereafter constituted, with any discretionary license or permit issued pursuant to any
Law of any public agency or official as well as with any provision of all recorded documents affecting the Project
site, insofar as any are required by reason of the use or occupancy of the Project site, and with all Laws
pertaining to nondiscrimination in employment and hazardous materials.
11. Bid Security Bonds. As a condition precedent to City's obligation to pay compensation to Contractor, and on or
before the Date of Execution, Contractor shall furnish to the Project Manager the Bid Security as required under
CITY OF PALO ALTO IFB 131437
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the Invitation For Bid.
12. Representations and Warranties. In the supply of any materials and equipment and the rendering of labor and
services during the course and scope of the Project and Work, Contractor represents and warrants:
a. Any materials and equipment which shall be used during the course and scope of the Project and Work
shall be vested in Contractor;
b. Any materials and equipment which shall be used during the course and scope of the Project and Work
shall be merchantable and fit to be used for the particular purpose for which the materials are required;
c. Any labor and services rendered and materials and equipment used or employed during the course and
scope of the Project and Work shall be free of defects in workmanship for a period of one (1) year after
the recordation of the Notice of Substantial Completion, or, if no such notice is required to be filed, on
the date that final payment is made hereunder;
d. Any manufacturer's warranty obtained by Contractor shall be obtained or shall be deemed obtained by
Contractor for and in behalf of City.
e. Any information submitted by Contractor prior to the award of Contract, or thereafter, upon request,
whether or not submitted under a continuing obligation by the terms of the Contract to do so, is true and
correct at the time such information is submitted or made available to the City;
f. Contractor has not colluded, conspired, or agreed, directly or indirectly, with any person in regard to the
terms and conditions of Contractor's Bid, except as may be permitted by the Invitation For Bid;
g. Contractor has the power and authority to enter into this Contract with City, that the individual executing
this Contract is duly authorized to do so by appropriate resolution, and that this Contract shall be
executed, delivered and performed pursuant to the power and authority conferred upon the person or
persons authorized to bind Contractor;
h. Contractor has not made an attempt to exert undue influence with the Purchasing Manager or Project
Manager or any other person who has directly contributed to City's decision to award the contract to
Contractor;
I. There are no unresolved claims or disputes between Contractor and City which would materially affect
Contractor's ability to perform under the Contract;
j. Contractor has furnished and will furnish true and accurate statements, records, reports, resolutions,
certifications, and other written information as may be requested of Contractor by City from time to time
during the term of this Contract;
k. Contractor and any person performing labor and services under this Project are duly licensed by the
State of California as required by California Business & Professions Code Section 7028, as amended;
and
I. Contractor has fully examined and inspected the Project site and has full knowledge of the physical
conditions of the Project site.
13. Assignment This Contract and the performance required hereunder is personal to Contractor, and it shall not be
assigned by Contractor. Any attempted assignment shall be null and void.
14. Claims of Contractor. All claims pertaining to extra work, additional charges, or delays within the Contract Time
or other disputes arising out of the Contract shall be submitted by Contractor to City in writing by certified or
registered mail within ten (10) Days after the claim arose or within such other time as may be permitted or
required by law, and shall be described in sufficient detail to give adequate notice of the substance of the claim
to City.
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15. Audits by City. During the term of this Contract and for a period of not less than three (3) years after the
expiration or earlier termination of this Contract, City shall have the right to audit Contractor's Project-related and
WOrk-related writings and business records, as such terms are defined in California Evidence Code Sections 250
and 1271, as amended, during the regular business hours of Contractor, or, if Contractor has no such hours,
during the regular business hours of City.
16. Notices. All agreements, appointments, approvals, authorizations, claims, demands, Change Orders, consents,
designations, notices, offers, requests and statements given by either party to the other shall be in writing and
shall be sufficiently given and served upon the other party if (1) personally served, (2) sent by the United States
mail, postage prepaid, (3) sent by private express delivery service, or (4) in the case of a facsimile transmission,
if sent to the telephone FAX number set forth below during regular business hours of the receiving party and
followed within two (2) Days by delivery of a hard copy of the material sent by facsimile transmission, in
accordance with (1), (2) or (3) above. Personal service shall include, without limitation, service by delivery and
service by facsimile transmission.
To City:
Copy to:
To Contractor:
City of Palo Alto
City Clerk
250 Hamilton Avenue
P.O. Box 10250
Palo Alto, CA 94303
City of Palo Alto
Dept -Utilities
Division -Engineering
Address -250 Hamilton Avenue
Palo Alto, CA 94303
Jim Bujtor, Project Manager
West Valley Construction Company, Inc.
P.O. Box 5639
San Jose, CA 95150
Attn: Dennis Poncato
17. Appropriation of City Funds. This Contract is subject to the fiscal provisions of Article III, Section 12 of the
Charter of the City of PalO Alto. Any charges hereunder for labor, services, materials and equipment may accrue
only after such expenditures have been approved in advance in writing in accordance with applicable Laws. This
Contract shall terminate without penalty (I) at the end of any fiscal year in the event that funds are not
appropriated for the following fiscal year, or (ii) at any time within a fiscal year in the event that funds are only
appropriated for a portion of the fiscal year and funds for this Contract are no longer available. This Section 17
shall control in the event of a conflict with any other provision of this Contract.
18. Miscellaneous.
a. Bailee Disclaimer. The parties understand and agree that City does not purport to be Contractor's
bailee, and City is, therefore, not responsible for any damage to the personal property of Contractor.
b. Consent. Whenever in this Contract the approval or consent of a party is required, such approval or
consent shall be in writing and shall be executed by a person having the express authority to grant such
approval or consent.
c. ContrOlling Law. The parties agree that this Contract shall be governed and construed by and in
accordance with the Laws of the State of California.
d. Definitions. The definitions and terms set forth in Section 1 of the City of Palo Alto Dept. of Public
Works Standard Drawings and Specifications (1992) of this Contract are incorporated herein by
reference.
CITY OF PALO ALTO IFB 131437
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e. Force Majeure. Neither party shall be deemed to be in default on account of any delay or failure to
perform its obligations under this Contract which directly results from an Act of God or an act of a
superior governmental authority.
f. Headings. The paragraph headings are not a part of this Contract and shall have no effect upon the
construction or interpretation of any part of this Contract.
g. Incorporation of Documents. All documents constituting the Contract documents described in Section 3
hereof and all documents which may, from time to time, be referred to in any duly executed amendment
hereto are by such reference incorporated in this Contract and shall be deemed to be part of this
Contract.
h. Integration. This Contract and any amendments hereto between the parties constitute the entire
agreement between the parties concerning the Project and Work, and there are no other prior oral or
written agreements between the parties that are not incorporated in this Contract.
I. Modification of Agreement. This Contract shall not be modified or be binding upon the parties, unless
such modification is agreed to in writing and signed by the parties.
j. Provision. Any agreement, covenant, condition, clause, qualification, restriction, reservation, term or
other stipulation in the Contract shall define or otherwise control, establish, or limit the performance
required or permitted or to be required of or permitted by either party. All provisions, whether
covenants or conditions, shall be deemed to be both covenants and conditions.
k. Resolution. Contractor shall submit with its Bid a copy of any corporate or partnership resolution or
other writing, which authorizes any director, officer or other employee or partner to actfor or in behalf of
Contractor or which authorizes Contractor to enter into this Contract.
I. Severability. If a court of competent jurisdiction finds or rules that any provision of this Contract is void
or unenforceable, the provisions of this Contract not so affected shall remain in full force and effect.
m. Status of Contractor. In the exercise of rights and obligations under this Contract, Contractor acts as
an independent contractor and not as an agent or employee of City. Contractor shall not be entitled to
any rights and benefits accorded or accruing to the City Council members, officers or employees of
City, and Contractor expressly waives any and all claims to such rights and benefits.
n. Successors and Assigns. The provisions of this Contract shall inure to the benefit of, and shall apply to
and bind, the successors and assigns of the parties.
o. Time of the Essence. Time is of the essence of this Contract and each of its provisions. In the
calculation of time hereunder, the time in which an act is to be performed shall be computed by
excluding the first Day and including the last. If the time in which an act is to be performed falls on a
Saturday, Sunday, or any Day observed as a legal holiday by City, the time for performance shall be
extended to the following Business Day.
p. Alternative Dispute Resolution. The parties shall endeavor to resolve any disputes or claims arising out
of or relating to this Contract by mediation. which, unless the parties agree otherwise, shall be
conducted under the auspices of the Judicial Arbitration and Mediation Service (JAMS). San Jose,
California. The intent ofthe parties is that the mediation shall proceed in advance of litigation; however,
if any party should commence litigation before the conclusion of mediation, such litigation, including
discovery, shall be stayed pending completion of mediation, and by executing this Contract the parties
stipulate to mediation in accordance with Santa Clara County Superior Court Local Rule 1.15 or Rule 2-
3(b) of the ADR Local Rules of the U.S. District Court for the Northern District of California, as such
rules may be amended from time to time. The parties shall share the cost of the mediation, including
the mediator's fee, equally. Any written agreement reached in mediation shall be enforceable pursuant
to California Code of Civil Procedure § 664.6, as amended.
CITY OF PALO ALTO IFB 131437
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q. Venue. Unless the parties mutually agree otherwise, mediation shall take place in San Jose, California,
In the event that litigation is commenced by any party hereunder, the parties agree that such action
shall be vested exclusively in the state courts of California in the County of Santa Clara or in the United
States District Court for the Northern District of California.
r. Recovery of Costs. Each Party shall bear its own costs, including attorney's fees, through the
completion of mediation. If the claim or dispute is not resolved through mediation, or if litigation is
necessary to enforce a settlement reached at mediation pursuant to California Code of Civil Procedure
§ 664.6, as amended, then the prevailing party in any subsequent litigation may recover its reasonable
costs, including attorney's fees, incurred subsequent to conclusion of the mediation.
s, Flow-down. Contractor agrees to include provisions of this Contract relating to Alternative Dispute
Resolution, Venue. and Recovery of Costs in any subcontracts or major material purchase agreements
which it enters into in connection with this Contract, and to require its subcontractors to include those
provisions in any sub-contracts or major material purchase agreements, such that any mediation or
litigation of any claim or dispute asserted by a subcontractor or major material supplier will be
consolidated with any related claim or dispute between the Contractor and the City. Should the
Contractor fail to do so, such that the City is required to defend an action brought by a subcontractor or
material supplier inconsistent with the Alternative Dispute and Venue provisions of this Contract,
Contractor shall indemnify City for City's costs of defense, including reasonable attorney's fees.
IN WITNESS WHEREOF, the parties have by their duly appOinted representatives executed this Contract in the city of
Palo Alto, County of Santa Clara, State of California on the date first stated above.
APPROVED:
CITY OF PALO ALTO
City Manager
APPROVED AS TO FORM:
City Attorney
CITY OF PALO ALTO IFB 131437
rev. 12100
WEST VALLEY CONSTRUCTION COMPANY, INC.
8y: __________________________________ _
Name: __________________ _
Title: __________________ _
PAGE 6 OF7
CERTIFICATE OF ACKNOWLEDGMENT
(Civil Code;} 1189)
STATE OF __________ _
COUNTY OF _________ -'
On , before me, _______________ a
notary public in and for said County, personallyaPloeclre(j ________________ ,
personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that he/shelthey executed the
same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature _________________ _
CITY OF PALO ALTO IFB 131437
rev. 12100
(Seal)
PAGE 7 OF7
"ISLe:{ SuVVtVVtCwtj § c;V~Lu~tLDV\..
Bidder UG 45 UG 17 UG 19 UG 24
$1,703,6781 $340,7591 $119,4051 $579,249
$416.800 $106.250 $368,130
$430,875 $126,790 $453,040
$2,040,851 $432,080 $132,550 $498,732
$2,337,803 $387,206 $171,927 $636.713
$2,279.595 $519,670 $163,120
anal Items Grand Totals
$450,0521 $3,193,143
$541 $3,669,495
$847,300 $3,860,550
$764,240 $3,868,453
595 $3,917
$792,950 $4,430,610
::J> --I --I
::J> C":> ::::J:: :s:::
rTl :z:: --I
cx:::J
ATTACHMENT C
CERTIFICATION OF NONDISCRIMINA1"ION FORM 410
PROJECT: Underground District 45, 17. 19 & 24 Substructure Installation
Certification of Nondiscrimination: As suppliers of goods and/or services to the City of Palo Alto in excess
of $5,000. the firm. contractor or Individual(s) listed below certify that: they do not and in the performance of
this contract they will not discriminate in employment of any person because of race, skin color, gender, age,
religion, disability, national origin, ancestry. sexual orientation, housing status, marital status, familial status,
weight or height of such person; and further certify that they are in compliance with all Federal. State and local
directives and executive orders regarding nondiscrimination in' employment.
........
Firm: ___ \Vl_~_,\!_YG.U_~_~_('~_"3m_ucttM_",,_._. Comp_, _mly,_. _,_tnc. ___ DATE: 6 .. ~5.og
Title of Officer Signing: AssISTANT VICSPmJDiNf
Signature: ~~
NlS • PONCA:l'O
.
CITY OF PALO ALTO IFB 131437 PAGE 1 OF 1
ATTACHMENT D
ADDENDUM NO.1
AGREEMENT FOR JOINT PARTICIPATION IN THE
INSTALLATION OF UNDERGROUND FACILITIES IN
UNDERGROUND UTILITY DISTRICT NO. 45
THIS AGREEMENT FOR JOINT P ARTICIPA TION IN THE INSTALLATION OF
UNDERGROUND FACILITIES ("Specific Agreement"), made and entered into this day of
____ , 2009, by and among THE CITY OF PALO ALTO, a California municipal corporation
("City"), PACIFIC BELL TELEPHONE COMPANY, a California corporation, doing business as
AT&T CALIFORNIA ("AT&T"), and COMCAST OF CALIFORNIA IX, INC., a California
corporation ("Comcast"), individually "Party" and collectively "Parties", in reference to the
following facts and circumstances:
1. The terms of the MASTER AGREEMENT FOR INSTALLATION OF
UNDERGROUND FACILITIES IN THE CITY OF P ALO ALTO ("Master Agreement"), executed
by the Parties on ,2009, are hereby incorporated in this Specific Agreement and
made a part hereof by reference.
2. City will act as the Trenching Agent for purposes of this Specific Agreement.
3. The project description is as follows: Installation of Underground Facilities in
Underground Utility District 45.
(or in accordance with the attachments).
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090728 jb 0073200
IN WITNESS WHEREOF, the Parties by their duly authorized representatives have
caused this Master Agreement to be executed on the date first above written.
ATTEST:
City Clerk
APPROVED AS TO FORM:
Senior Asst. City Attorney
APPROVED:
City Manager
Director of Administrative
Services
Director of Utilities
Attachments:
CITY OF PALO ALTO
Mayor
PACIFIC BELL TELEPHONE COMPANY
DBA AT&T CALIFORNIA
COMCAST OF CALIFORNIA IX, INC.
Name: --------------------
Title: ---------
EXHIBIT "A": Supplemental Terms of Agreement for Underground Conversion Project
Utility and Trench Substructure
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EXHIBIT" A"
SUPPLEMENTAL TERMS OF AGREEMENT
FOR UNDERGROUND CONVERSION PROJECT
UTILITY AND TRENCH SUBSTRUCTURE
A. CONSTRUCTION CONTRACT is awarded by the Trenching Agent, and is hereby
incorporated by reference (see attached bid items for breakdown of cost estimate).
1. All bid items dedicated to the City's sole benefit and use shall be charged 100% to
the City.
2. All bid items dedicated to AT&T's sole benefit and use shall be charged 100% to
AT&T.
3. All bid items dedicated to Comcast's sole benefit and use shall be charged 100% to
Comcast.
4. All joint trench bid item costs incurred for the collective benefit of the Parties will
be determined using a space/cost allocation formula, which divides the minimum
trench area required for each trench occupant, individually, by the sum of the
minimum trench areas for all occupants.
For example, __ ... ______________ _
5. Pavement and surface restoration over joint trench costs shall be shared equally by
the number of occupants in the trench.
6. All optional bid items, whenever used, shall be charged, individually or jointly
depending on how the items are used.
7. Cost of compaction testing shall be shared equally by the number of occupants in the
trench.
8. The Trenching Agent shall require its construction contractor to provide a two-year
warranty on materials provided and work performed from the date of acceptance of
the Project by the Trenching Agent.
9. The City shall abide by AT&T's Tariff with respect to obtaining the necessary
permits and licenses in accordance with applicable law. In the event of a conflict
between the terms of this Master Agreement or any Amended Master Agreement
and the terms of the Tariff, the terms of the Tariff shall govern.
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090728 jb 0073200
B. BID PACKAGE AND CONTRACT ADMINISTRATION
1. Fifteen percent (15%) of each ofthe Non-Trenching Parties' share of the actual cost
of construction shall be added, respectively, for engineering, Project's plans and
specifications, and contract administration by the Trenching Agent, including costs
of inspections perfonned by the Trenching Agent.
Formula
Palo Alto (Electric) % = {PW x PD/(PW x PD + TW x TD + CW x CD)) * 100
AT&T (Telephone) % = {TW x TD/(PW x PD + TW x TD + CW x CD)} * 100
Corncast (Cable TV) % {CW x CD/(PW x PD + TW x TD + CW x CD)} * 100
P -City of Palo Alto -Electric
T AT&T Telephone
C Corncast -Cable TV
D Depth of Trench required for individual utility
W -Width of Trench required for individual utility
Section C (1 thru 6)
C. FORCE ACCOUNT AND WHEN CITY'S SHARE IS LESS THAN $85,000
These prices shall apply when the joint installation is to be perfonned by City's force
account using annual contracted services. The prices shall be revised every 12 to 18
months.
1. Trenching
Cost of trenching in all surfaces shall include all labor and material for saw cutting,
digging, hauling, disposal of spoil, backfill, compaction, and complete surface
restoration. The cost for AT&T or Corncast shall be:
a. $26.33 per foot when trench is shared by City, AT&T and Corncast.
b. $39.50 per foot when trench is shared between City and either AT&T or
Corncast.
c. $79 per foot when trench is for AT&T or Corncast use only.
2. Placing Boxes
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090728 jb 0073200
Cost of placing splice boxes shall include all material cost where applicable and all labor
for excavating, grading, and backfilling around the boxes and all restoration work The
cost for AT&T or Comcast shall be:
a. $340 each for -11 tlxl7t1
-N9 box (box to be furnished by City)
b. $874 each for -I7"x30" -PO 1730 (box to be furnished by City)
d. Unit cost for larger splice boxes will be based on the actual cost charged by
contractor.
3. Conduit Installation
Cost of installing conduits shall include all material cost and labor for conduit
termination at each end and pulling rope between points of termination. The cost for
AT&T or Comcast shall be:
a. $2.50 per foot for I-inch conduits
b. $4.00 per foot for 2-inch conduits
c. $6.00 per foot for 4-inch conduits
Note: No end-bells will be installed
Installation of2" Riser will be $150.00 each.
4. Resurfacing
Cost of resurfacing shall include all labor and materials for forming, pouring, finishing,
removal of debris and restoration of all adjacent surfaces. The cost for AT&T or
Comcast shall be:
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Description Sidewalk! 2" AC over 7" Curb and Gutter per In.
Driveway per PCC or 8" Agg ft.
sq. ft. base per sq. ft.
a. When construction $10.00 $10.00 $25.00
involves City, AT&T and
Corncast
b. When construction $15 $15 $37.5
involves City and
either AT&T or Corncast
5. Saw Cutting
The cost for AT&T or Corncast shall be:
a. $12.00 per lineal feet
6. Incidental
Incidental cost shall include administration, inspecting and compaction testing. Cost for
AT&T or Corncast shall be fifteen percent (15%) of the total individual cost.
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LEGEND ---Project Boundary
APPROVED 27 Feb 2008
Jim Suitor
SR. ENGINEER I MANAGER
ENGR. JB
DRWN PD
CHKD. JB
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S.P.R.R.
Underground Utility District No. 45 REV. DATE APPR. DESCRIPTION Bounda~Map r-~~~+-~~~~~
Palo Av, Alma St, High St & Lytton Av Area 1-;--+----1-------1
City of Palo Alto tM;-:;AP~#tC:::;KT;-:#~SC=-AL:iE -~----J
California
UTILITIES, ELECTRIC ENGINEERING NTS r-;;;-;;::;:::;:--:--~::--:-:'---1 OF 2
4
LEGEND ---
Project Boundary ~~~~~~~~ ______ -A~
APPROVED 27 Feb 2008
Jim Sujtor
SR. ENGINEER I MANAGER
ENGR. JB
DRWN PO
CHKD. JB
Underground Utility District No. 45 t-R_E_V't--DA_TE-t-AP...:.-PR~. f----=D:::ES:::.CR~IP..:..:TIO::N~__I
Boundary Map
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California SAP 40009247
UTILITIES, ELECTRIC ENGINEERING NTS [------;;;-;;::-;::~~:..:;;~-I SHEET 2 OF 2
ATT ACHMENT F
11
TO: HONORABLE CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT: UTILITIES
DATE: MAY 5,2008 CMR: 220:08
SUBJECT: ADOPTION OF AN ORDINANCE AMENDING SECTION 12.16.020 OF
CHAPTER 12.16 OF TITLE 12 OF THE PALO ALTO MUNICIPAL CODE
BY ESTABLISHING UNDERGROUND UTILITY DISTRICT NO. 45
(PALO ALTO AVENUE, ALMA STREET, HIGH STREET, LYTTON
A VENUE AND CAMBRIDGE A VENUE)
RECOMMENDATION
Staff recommends that Council adopt the attached Ordinance to create Underground Utility
District No. 45 (UUD 45) and thereby amend Section 12.16.020 of Chapter 12.16 of TitIe 12 of
the Palo Alto Municipal Code.
BACKGROUND
The Electric Utility's undergrounding project areas are selected and recommended to AT&T and
Comcast based on the age and ability to maintain the existing overhead electric system. AT&T
and Comcast determine whether the recommended area meets the criteria for undergrounding
based on the guidelines established by the California Public Utilities Commission (CPUC).
UUD 45 meets the City's and CPUC's guidelines for undergrounding overhead utility lines. The
attached Exhibits "B" and "c" show the boundaries of UUD 45. The attached Exhibit "D"
provides additional background and history on undergrounding of electric utilities.
Cost-sharing of underground utility district projects has been determined by agreement between
the City, AT&T, and Comcast. The cost for joint trench bid items is determined using a
space/cost allocation formula, which divides the minimum trench area required for each trench
occupant individually by the sum of the minimum trench areas for all occupants.
At the March 10, 2008 meeting, Council passed Resolution of Intent No. 8802 to establish UUD
45. The May 5, 2008 Council meeting has been set as the date of the public hearing on the
matter. Notices announcing the meeting with a description of the project and a copy of the
Resolution were mailed to all property owners in the proposed district on April 4, 2008.
CMR: 220:08 Page 1 of3
DISCUSSION
This underground project will result in the removal of 45 poles and provision of underground
service to 45 properties, of which a small percentage are residential properties. Completion of
this project will eliminate overhead distribution lines in an area bordered by existing
underground districts and will enhance reliability of the electric distribution system while
improving aesthetics.
If an underground district is created, the Utilities Department will prepare plans and
specifications and obtain bids for installation of the underground substructure. Underground
substructure construction consists of the installation of conduits, vaults, concrete pads and boxes.
The Utilities Department will install the electric distribution cables, transformers and switches
upon completion of the substructure installation. After the new underground system (cable,
transformers, switches, etc.) has been tested and energized, the property owners will be notified
that they have 60 days to connect to the new underground system. Upon completion of the new
connections, utility crews will remove the overhead power lines, and telephone crews will
complete the project by removing the remaining telephone and cable television facilities and
poles.
TIMELINE
Upon Council approval and completion of the public hearing, the following will occur as
proposed:
May 5, 2008* Introduction and first reading of Ordinance Establishing Project Area as
Underground Utility District No. 45
May19,2008*
November 2008*
January 2009
March 2009*
May 2009
through July 2009
July 2009
through Sept 2009
Second reading and adoption of Ordinance.
Award of construction contract and Joint Construction Agreement with
AT&T IComcast.
Substructure (conduits, vaults, etc.) installation by Contractor
Resolution determining properties electing to pay service conversion cost
over a period of 10 years
Installation of underground facilities (cable, switches, etc.)
Service conversion work by property owners
October 2009 Pole removal and project completion
through Jan 2010
* Denotes Council Action
CMR: 220:08 Page 2 of3
RESOURCE IMPACT
The total cost of the project is estimated at $2,350,000. The majority of the cost will be for the
substructure installation of underground facilities ($1,450,000). The remaining funds will be
utilized for engineering ($100,000), electric equipment & cables ($680,000), and removal of
overhead facilities ($120,000). AT&T and Comcast will reimburse approximately $700,000 to
the City for the installation of telephone and cable television conduits and boxes in accordance
with an agreement with the three parties. Construction and installation costs of this project have
been budgeted in the FY 2008-09 and 2009-10 Utilities Department Electric Capital
Improvement Program budget.
The cost of the required service conversions on private property is to be borne by the individual
owners in accordance with Utility Rule and Regulation No.17. The total cost for the property
owners requiring service conversions from overhead to underground has been estimated at
$200,000. The property owners have been offered the option of financing their service
conversions under Section 12.16.091 of Palo Alto Municipal Code which provides for City loans
to property owners to fund the service conversions. Property owners repay the loan and
administrative costs, which are added to their property tax bills, over a ten-year period, at an
interest rate approved by the Council.
POLICY IMPLICATIONS
This recommendation is consistent with the Council-approved Utilities Strategic Plan to invest in
utility infrastructure to deliver reliable service. The project furthers Program L-80 (the
continuation of Citywide undergrounding of utility wires) and L-81 (the use of compact and
well-designed utility elements) of the Comprehensive Plan.
ENVIRONMENTAL REVIEW
This project is categorically exempt from the California Environmental Quality Act under
California Public Resources Code Section 15302(d) (conversion of overhead electric utility
distribution system facilities to underground).
ATTACHMENTS
A: Ordinance
B: Underground Utility District No. 45 Boundary Map -Palo Alto A venue, Alma Street, High
Street and Lytton Avenue area
C: Underground Utility District No. 45 Boundary Map Cambridge Avenue area
D: Background and History on Underground of Electric Utilities
PREPARED BY:
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
CMR: 220:08
JAMES BUJTOR
Sr. Electric Project Engineer
VALERIE FONG
Director of Utilities
STEVE EMSLIEIKELLY MORARIU
Deputy City Managers
Page 3 of3
fol1ows:
NOT YET APPROVED , ATTACHMENT A
ORDINANCE NO.
ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO
AMENDING SECTION 12.16.020 OF CHAPTER 12.16 OFTITLE 12 OF
THE PALO ALTO MUNICIPAL CODE BY ESTABliSHING
UNDERGROUND UTILITY DISTRICT NO. 45
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1.. Findings and Declarations. The City Council finds and declares as
(a) This Council, on March 10, 2008, adopted Resolution No. 8802, declaring its
intention to amend Section 12.16.020 of Chapter 12.16 of Title 12 of the Palo Alto Municipal Code
by establishing Underground Utility District No. 45 in the City and by such Resolution appointed
Monday, MayS, 2008, at the hourof7:00 p.m., in theCounci1 Chambers, City Han, at 250 Hamilton
A venue, Palo Alto, California. as the time and place of hearing protests and receiving evidence for
and against the proposed action and notice of direction.
(b) Notice was given of the time and place therein stated in the manner provided by
law, as appears from the affidavits on file in the office of the City Clerk.
(c) This matter came on regularly for hearing at the time therein fixed.
(d) All written protests and other written communications were publicly read at this
meeting and evidence duly taken and all persons desiring to be heard were fully heard.
(e) The public necessity, health and safety require the removal of poles and overhead
lines and associated overhead structures from that certain area described in Resolution No. 8802.
SECTION 2. Section 12.16.020 of Chapter 12.16 of Title 12 of the Palo Alto Municipal
Code is hereby amended by adding Subsection (41) thereto to read as follows:
"(45) District No. 45. All of the area in the County of Santa Clara, City of Palo
Alto, encompassing the areas contiguous with portions of Palo Alto A venue,
Alma Street, High Street, Lytton A venue and Cambridge A venue Underground
Utility District Number 45, on file in the office of the City Clerk."
SECTION 3. The "Underground Utility District Maps" referred to in Section 12.16.020
shall be amended to add to the areas shown on the map those referred to in Resolution No. 8802.
SECTION 4. The City Council hereby finds that the adoption of this ordinance
constitutes the approval of a project that is categorically exempt from environmental review under
the California Environmental Quality Act pursuant to CaJiforniaPubJic Resources Code § 15302(d)
(Conversion of Overhead Electric Utility Distribution System Facilities to Underground).
1
NOT YET APPROVED
SECTION 5. This ordinance shall become effective upon the expiration of thirty (30)
days from its passage.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
ATTEST:
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
Deputy City Attorney City Manager
Director of Utilities
2
LEGEND ---Project Boundary
APPROVED 27 Feb 2008
Jim Bujtor
SR. ENGINEER / MANAGER
ATTACHMENT B
Underground Utility District No~ 45 I---+---+--.J.-------I
Boundary Map
Av, Alma St, High St & Lytton Av Area I---t--+--+--------I
Citx of Palo Alto
California'
UTILITIES, ELECTRIC ENGINEERING
LEGEND
APPROveD 27 Feb 2008 Underground Utility District No. 45
Boundary Map
cambridge Avenue Area
City of Palo Alto
California
UTILITIES, ELECTRIC ENGINEERING
ATTACHMENT C
BACKGROUND
BACKGROUND AND HISTORY ON
UNDERGROUNDING OF ELECTRIC UTILITIES
History 0/ Undergrounding
ATTACHMENT D
The City of Palo Alto began a program to underground overhead electric, telephone, and cable TV
facilities in 1965 with a project along Oregon Expressway. Since that time 42 Underground Districts
have been fonned. The main reasons for starting the undergrounding program in Palo Alto were to
improve the aesthetics of the neighborhoods and to improve service reliability by reducing the impacts of
weather on the electric distribution system.
To establish the undergrounding program, the city amended the Municipal Code adding Chapter 12.16
titled Underground Utilities. All new development after 1965 was required to have underground
facilities. This requirement resulted in the undergrounding of electric facilities for most of the
commercial areas outside of the older commercial developments in the University Avenue and California
A venue districts.
Types 0/ Underground Districts
Rules for establishing an underground district in the City are covered by Utility Rule and Regulation 17.
This rule establishes three types of underground districts: General Public Benefit, Primarily of Local
Public Benefit, and areas that do not qualifY under the preceding types. General Public Benefit projects
are established by the City and the City pays for the installation of the electric system in the public right-
of-way (ROW) and the residents pay for conversion of the facilities on their property. In the remaining
two conversion area types, the residents must request the underground district and fund the service
conversion on their property as well as a portion oftheutility costs in the public ROW.
Most of the projects completed have been established under the General Public Benefit provision.
Joint Construction on Utilities Poles
The poles within the City of Palo Alto are jointly owned with AT&T or in some cases jointly owned with
AT&T and PG&E. Comcast leases space on the poles from AT&T for the attachment of cable TV cables.
Due to the joint ownership of the poles, underground districts require agreement by the other joint
owners. Once agreement on the Underground District boundaries has been reached, the conduits and
structures are jointly constructed. Joint construction is used to reduce costs and coordinate the
construction to minimize impacts on the neighborhoods.
Agreement on Underground District boundaries by AT&T is subject to AT&T's ability to recover its
costs pursuant to California Public Utilities Commission's (CPUC) Schedule A2Rule 32 on
undergrounding which specifies the criteria for different levels of financial participation by AT&T.
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The applicable section of Rule 32 is critical to the financial viability of the underground project. If a
:."'" project qualifies under section A.I of Rule 32, the project has been found to have General Public Benefits,
and AT&T and Comcast fund all the their improvements in the public right-of-way. If it is detennined
that Rule 32A.2 or 32A.3 are applicable to the project, the cost responsibility for the Cable TV and
Telephone conduits and other structures shifts either to the City or to the residents. In the past, once
AT&T had detennined that the proposed area did not qualify under Rule 32A. I the City has canceHed the
underground project because of the increased costs to the Electric Utility and moved forward on
undergrounding projects in areas where the telephone company would participate. Currently there are
only a few small areas where the telephone company will participate.
To facilitate the coordination between the parties in an Underground District, a master agreement has
been signed by the City, AT&T, and Cable TV. This master agreement is amended each time an
underground district is formed to include the new Underground District.
Funding for Underground Districts
General Benefit Undergrounding was funded at approximately 2% of annual electric revenues. Beginning
in 1998, funding was reduced to 1% per year due to the need to shift electric resources to rebuilding aging
infrastructure. The current funding which has been recently returned to 2% of annual electric revenues
converts, on average, electric facilities for approximately 150 to 200 homes per year.
The reduction in funding to 1 % of revenues for underground districts was initiated about J 0 years ago to
"free up" revenues and resources to focus on replacing underground facilities reaching the end of their
useful lives. Cables installed in the sixties and seventies had an expected cable life of 30 years. In the
late nineties a significant portion of the city's underground system had exceeded its expected life and
failures were beginning to occur at an increasing rate. To reduce the rate of failure, an accelerated
infrastructure program was initiated to replace the cables that had exceeded their life expectancies.
Because of staffing constraints the underground program was temporarily scaled back.
Costs that AT&T can recover from its rate payers for funding General Public Benefit Undergrounding
under Rule 32A.l are limited. The restrictions on AT&T's funding limit the City'S abiJity to accelerate
the undergrounding program beyond 2% of revenues while still receiving the fulJ rule 32A.l level of
participation from AT&T.
In addition the cost of the required service conversions on private property is borne by the individual
owners in accordance with Utility Rule and Regulation No.1? This cost can range from $5,000 to
$8,000. In order to reduce the burden of the service conversion cost to property owners in underground
districts the property owners are offered the option of financing their service conversion cos·ts over a
period of ten years with interest in accordance with the procedure given in Section 12.]6.090 through
12.16.096 of the Palo Alto Municipal Code. The CMR that accompanies this document seeks approval of
a resolution listing property owners electing to participate in the service conversion financing offered by
the City.
Budgeting
Funding for the Underground Districts is approved by the City Council during the annual budget process.
In addition to the current fiscal year's funding, staff also provides four additional years of projected
funding for proposed undergrounding projects. These future projects are not approved for construction
. until the budget for these projects is approved each fiscal year. Each year staff reevaluates the future year
recommendations. and proposes changes based on additional information acquired since the last budget
cycle including AT&T's participation in covering project costs.
.'
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Selecting Underground Districts
Proposed undergrounding districts are detennined by applying the priorities in Rule 17 and negotiations
with AT&T as joint pole owners. In addition, Comcast, which leases pole space from AT&T, must also
fund part of the underground costs to move their facilities.
The City Electric Utility takes the lead in proposing boundaries for an underground project. AT&T's
agreement is driven by its ability to recover costs under rules that differ from Utility Rule and Regulation
No. '7. Recently the City was advised by AT&T that the proposed underground district planned for FY
2007-08 did not qualifY under section A.I of Rule 32, and that AT&T would be unable to fund all the
improvements in the public right-of-way, resulting in the cost responsibility for the telephone substructure
shifting to the City or the residents within the proposed districts.
To give a perspective on this impact, the present cost to the City for undergrounding is about $ J 5,000 per
home. This does not include the additional cost for each homeowner of about $5,000 for their service
conversion. If the City continues undergrounding without AT&T and Comcast reimbursements, the cost
to the City per home increases to approximately $20,000, '~m increase of 33%.
Future of Program
The overhead lines for approximately ] 4, ] 00 homes remain to be undergrounded and the current program
undergrounds facilities for approximately 200 homes per year.
If the City were to proceed with the program without AT&T and Comeast reimbursements at the present
funding rate of 2% of annual electric revenues, it is expected to take approximately ] 00 years more to
complete the undergrouriding of the entire city at a cost of $296,100,000. This is based on the current
value of the dollar. Under the current program the electric rate payers would be responsible for funding
approximately $225,600,000 and the property owners would be responsible for funding about
$70,500,000 of total cost.
In light of the recent position taken by AT&T to suspend participation in undergrounding of utilities
where AT&T is not able to recover costs from its ratepayers, staff is reviewing with AT&T and Comcast
potential undergrounding project areas in the City. If an agreement is reached with AT&T on additional
areas for undergrounding of utilities, then staff wiU obtain Council approval for undergrounding of such
areas to continue the undergrounding program.
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