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Home My WebLink AboutStaff Report 302-05.' , ' City of Palo Alto City Manager's Report 3 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: UTILITIES DATE: JULY 11, 2005 CMR:302:05 ! SUBJECT: RESOLUTION DETERMINING UNDERGROUND DISTRICT NO. 40 PROPERTY OWNERS WHO ELECT TO PAY UNDERGROUND CONVERSION COSTS OVER A PERIOD OF YEARS RECOMMENDATION Staff recommends that Council approve and authorize the Mayor to execute the attached Resolution which allows the use of funds available in the Electric Reserve for Underground Connections, to provide loans and assess the property owners in Underground District No. 40 who have elected the option of using such loans to pay electric service conversion costs over a period of 10 years. BACKGROUND At its meeting on March 22,2004, Council adopted Ordinance No. 4822 creating Underground Utility District No. 40 in the 1700 through 1900 block of Edgewood drive area. 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 9 of the 18 property owners in the district selected the deferred payment plan. The underground project is a general benefit underground district, with the City paying all costs except the individual property underground service conversions. DISCUSSION The conversion costs for the 9 property owners who have chosen the deferred payment plan total $41,743. 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 ofthe loan. Repayment to the City will be made through the owner's property tax bills. ~s mandated in the Palo Alto Municipal Code, interest rates were established the week preceding adoption of the ordinance forming the underground district. Using this rate guideline, the interest rate for the loans'will be 5.1 %. A $50 loan- processing fee is added to each assessment. CMR:302:05 Page 1 of2 RESOURCE 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 August 16,2004, the balance in the reserve for underground connections was $664,000. This'is the 17th underground district fonned since Council established the Reserve for the Underground Connections to pay to individual property service conversions. This method of assisting with service conversion cost has proven to be safe, effective and popular. The total estimated service conversion cost for all customers in Underground District No. 40 is $75,716. The City's total cost for Underground District No. 40 is estimated to be $257,000. POLICY IMPLICATIONS This recommendation is consistent with the Council approved Utilities Strategic Plan Key Strategy #7, "Implement programs that improve the quality of the environment". ENVIRONMENTAL REVIEW This project is categorically exempt from California Environmental Quality Act (CEQA). ATTACHMENTS A: Resolution B: Property Owner List C: Underground District 40 -Boundary Map PREPARED BY: J)atriCk Valath, Senior Electric Project Engineer ~' -J _r --r;hx UI?1.-~ DEPARTMENT HEAD: kFY JD , HNULRICH Director of Utilities CITY MANAGER APPROVAL: ~ H~ EMI HARRISON Assistant City Manager CMR:302:05 Page 2 of2 '\ follows: NOT YET APPROVED RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO DETERMINING OWNERS OF PROPERTIES ELECTING TO PAY CONVERSION COSTS OVER A PERIOD OF YEARS, DETERMINING AND CLASSIFYING UNPAID ASSESSMENTS, AND FUNDING LOANS TO PROPERTY OWNERS FROM THE ELECTRIC RESERVE FOR UNDERGROUND CONNECTIONS UNDERGROUND UTILITIES CONVERSION UNDERGROUND UTILITY ASSESSMENT DISTRICT 40 The Council of the City of Palo Alto does RESOLVE as SECTION 1. 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. 40 on March 22, 2004, by adopting Ordinance No. 4822. 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 (10) 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 proceedings under and pursuant to Resolution of Intention to form said District, being Resolution No. 8393, adopted on January 20, 2004, the assessments proposed to be levied should be made to mature over a period of ten (10) 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 proyide 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 $41,743.00. 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 1 050623 cJ 0072573 NOT YET APPROVED over the period of ten (10) years and that said costs shall represent the unpaid assessments in these proceedings. 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 $41,743.00 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 (10) 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 5.1 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: MOSSAR ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Senior Asst. City Attorney 050623 cI 0072573 2 APPROVED: Mayor City Manager Director of Utilities Director of Administrative Services · , Underground Utility District No. 40 1700 thru 1900 Block of Edgewood Drive Property Owners(s) Parcel No. Address Arfin David & Chaleff Madeline 3-14-64 1741 Edgewood Drive Wu Wanqing & Feng Ping 3-15-13 1761 Edgewood Drive Griswold Roger And Silvia S 3-15-10 1813 Edgewood Drive Smith Gerould H Jr & Mary A 3-15-09 1823 Edgewood Drive Robe' H Karl & Gaitana M Trustee 3-15-08 1833 Edgewood Drive Schwartz Richard H & Levy Janet 3-15-07 1843 Edgewood Drive Leong Samuel J & Suzanne J Trustee 3-15-06 1853 Edgewood Drive Myers Curttis J & Marguerite 3-15-05 1843 Edgewood Drive Fletcher Kim & Bedworth Peter 3-17-77 1921 Edgewood Drive TOTAL CMR:302:05 ATTACHMENT B Assessment Principal $ 3,900.00 $ 5,220.00 $ 4,640.00 $ 6,000.00 $ 5,219.00 $ 3,940.00 $ 4,480.00 $ 3,700.00 $ 4,644.00 $ 41,743.00 1 .' .' '~'" "'" .. . ., ..... • l ..... '·.< . ,:::£ ...... / ......... "" ........ ~. .... ...... _-_. . ./ ". /~. I· APPROVED _____ _ p, Vo.lo.th SR. ENGINEER I MANAGER ENGR. Jo.Mshici DRWN Jo.Mshici CHKD. p, V o.lo. th ..... , ' .. . ..... . ~ '~' . ....... "" . ,;::::r:.?\.,tr I 1700-1900 Ed£ewood Dr. UG Conversion ject Boundary City of Palo Alto California UTILITIES, ELECTRIC ENGINEERING CMR:302:05 Attachment C ....... " ~'"' . : j .... ! ! "" " • .!"., ~"" -•••• --. SAP# 40000$1~ REV. DATE APPR. DESCRIPTION MAP # CKT # SCALE W.O.#/ DRAWING # 18 19 HD3 NTS 1--:::==-2-:2;-1_0=3:--:;--1 SHEET 1 OF 1 >,