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HomeMy WebLinkAbout2004-10-04 City Council (2)City of Palo Alto Manager’s Report TO:HONORABLE CITY COUNCIL 16 FROM:CITY MANAGER DEPARTMENT: UTILITIES DATE: SUBJECT: OCTOBER 4, 2004 CMR:405:04 RESOLUTION DETERMINING UNDERGROUND DISTRICT NO. 38 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 determining Underground District No. 38 property owners electing to pay conversion costs over a period of years, determining and classifying unpaid assessments, and funding loans to property owners from the Reserve for Underground Connections. BACKGROUND At its meeting on February 23, 1998, Council adopted Ordinance No. 4483 creating Underground Utility District No. 38 for the High Street, Cowper Avenue, Oregon Expressway and Colorado Avenue 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 39 of the 192 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 39 property owners who have chosen the deferred payment plan total $168,704. The original estimates are seven years old, as this project was initially delayed due to insufficient funds and later delayed due to prolonged negotiations with SBC Califomia over the joint construction agreement. Based on six property owners who have reported their 2004 estimated costs, the average 2004 estimated service conversion cost is $4625 compared with the average 1997 estimated cost of $3666. This represents a cost increase of 26%. Therefore, to compensate for the inflation and increasing contractor prices over that period of time, 30% been added to the original estimated cost of each property to offset the estimated increase in materials and labor costs. The higher costs are primarily due to the current demand CMR:405:04 Page 1 of 2 for construction work and limited number of contractors interested in performing residential service conversion work. 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. As 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 5.82%. A $50 loan-processing fee is added to each assessment. 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. The total estimated service conversion cost for all customers in Underground District No. 38 is $638,755. The City’s total cost for Underground District No. 38 is estimated to be $2,300,000. 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 PREPARED BY: Tom Finch // ~ / DEPARTMENT HEAD: ~orl~o~ Utilities "~ Assistant City l~anager CMR:405:04 Page 2 of 2 **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 38 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. 38 on February 23, 1998, by adopting Ordinance No. 4483. 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 proceedings under and pursuant to Resolution of Intention~to form said District, being Resolution No. 7717, adopted on October 27, 1997, 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 $178,399.00. 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 040903 cl 0072437 1 **NOT YET APPROVED** over the period of ten (i0) 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 $178,399.00 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 (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 5.82 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: Mayor City Manager Senior Asst. City Attorney Director of Utilities Director of Administrative Services 040903 cl 0072437 Underground Utility District No. 38 High/Cowper/Oregon and Colorado Avenue Property Owners(~ Allen & Linda Fujimato Michael G. Fogarty James J. and Ruby D. Christensen Mary S. Griffin Elise Belensky Virginia Johnson Donald L. and Betty J. Carpenter, Trustees Mary Ann Peters, PhD Betsy M. Hunton Anne Firth Murray Dean R. and Cynthia Samos .Shigenobu Ohara Ruth V. Waters Timothy & Sherry Read John L. & Jane F. Harris Fran Wagstaff Eugene and Judy Lewit Erhard and Frances Christiansen Erhard and Frances Christiansen Erhard and Frances Christiansen Donald and Elizabeth C. Streepey Margaret M. Christensen Myrna Canizares Patty Cullen Erhard and Frances Christiansen Marian Stewart Honeyman Bernard L. Pawloski Robert and Michele Kwasnick Douglas and Diana Paul Leonard and Mary Jo Leonard Beatrice Turner Sandra Vieau Kenton Lee Steven K. and Cecilia C. Long David J. Jue David R. Claudino Paul O’Reilly and Gwen Fischer Jobe and Jean F. Jenkins William K.S. and Margaret Leong Parcel No. Address 132-17-003 132-12-048 132-12-046 132-12-045 132-17-008 132-17-009 132-12-041 132-18-085 132-12-038 132-12-037 132-13-072 132-08-009 132-07-012 132-08-002 132-08-103 132-02-081 132-17-050 132-17-061 132-17-060 132-17-059 132-17-058 132-17-076 132-08-031 132-17-024 132-17-023 132-17-028 132-17-029 132-17-022 132-17-033 132-12-051 132-12-017 132-12-002 132-07-033 132-12-004 132-12-006 132-12-008 132-12-009 132-12-010 132-13-067 2420 Bryant Street 2421 Bryant Street 2441 Bryant Street 2451 Bryant Street 2460 Bryant Street 2480 Bryant Street 2485 Bryant Street 2500 Bryant Street 315 Colorado Ave. 329 Colorado Ave. 346 Colorado Ave. 495 Colorado Ave. 2451 Cowper Street 2564 Cowper Street 2598 Cowper Street 2601 Cowper Street 2448 Emerson Street 2415 High Street 2429 High Street 2447 High Street 2461 High Street 2497 High Street 478 Marion Avenue 2411 Ramona Street 2421 Ramona Street 2424 Ramona Street 2430 Ramona Street 2431 Ramona Street 2470 Ramona Street 2412 South Court 2521 South Court 2410 Waverley St. 2431 Waverley St. 2434 Waverley St. 2460 Waverley St. 2490 Waverley St. 2508 Waverley St. 2510 Waverley St. 2600 Waverley St. Assessment 4,550.00 3,921.00 4,450.00 6,057.00 3,563.00 4,950.00 4,300.00 2,850.00 3,665.00 3,665.00 2,753.00 3,640.00 3,540.00 3,809.00 6,284.00 3,969.00 4,085.00 3,968.00 3,968.00 8,049.00 9,143.00 2,646.00 4,550.00 4,044.00 4,503.00 3,456.00 5,266.00 4,764.00 4,391.00 4,008.00 4,884.00 6,591.00 4,515.00 6,050,00 4,928.00 6,826.00 5,451.00 3,699.00 2,648.00 TOTAL 178,399.00 Exhibit "A" CMR:405:04 Attachment B Underground Utility District No. 38 High/Cowper/Oregon and Colorado Avenue Property Owners(s) Allen & Linda Fujimato Michael G. Fogarty James J. and Ruby D. Christensen Mary S. Griffin Elise Belensky Virginia Johnson Donald L. and Betty J. ¯ Carpenter, Trustees Mary Ann Peters, PhD Betsy M..Hunton Anne Firth Murray Dean R. and Cynthia Samos Shigenobu Ohara Ruth V. Waters Timothy & Sherry Read John L. & Jane F. Harris Fran Wagstaff Eugene and Judy Lewit Erhard and Frances Christiansen Erhard and Frances Christiansen Erhard and Frances Christiansen Donald and Elizabeth C. Streepey Margaret M. Christensen Myrna Canizares Patty (.;ullen Erhard and Frances Christiansen Marian Stewart Honeyman Bernard L. Pawloski, Robert and Michele Kwasnick Douglas and Diana Paul Leonard and Mary Jo Leonard Beatrice Turner Sandra Vieau Kenton Lee Steven K. and Cecilia C. Long David J. Jue David R. Claudino Paul O’Reilly and Gwen Fischer Jobe and Jean F. Jenkins William K.S. and Margaret Leong Parcel No. Address 132-17-003 242f) Bryant Street 132-12-048 2421 Bryant Street 132-12-046 2441 Bryant Street 132-12-045 2451 Bryant Street 132-17-008 2460 Bryant Street 132-17-009 2480 Bryant Street 132-12-041 2485 Bryant Street 132-18-085 2500 Bryant Street 132-12-038 315 Colorado Ave. 132-12-037 329 Colorado Ave. 132-13-072 346 Colorado Ave. 132-08-009 495 Colorado Ave. 132-07-012 2451 Cowper Street 132-08-002 2564 Cowper Street 132-08-103 2598 Cowper Street 132-02-081 2601 Cowper Street 132-17-050 2448 Emerson Street 132-17-061 2415 High Street 132-17-060 2429 High Street 132-17-059 2447 High Street 132-17-058 2461 High Street 132-17-076 2497 High Street 132-08-031 478 Marion Avenue 132-17-024 2411 Ramona Street 132-17-023 2421 Ramona Street 132-17-028 2424 Ramona Street 132-17-029 2430 Ramona Street 132-17-022 2431 Ramona Street 132-17-033 2470 Ramona Street 132-12-051 2412 South Court 132-12-017 2521 South Court 132-12-002 2410 Waverley St. 132-07-033 2431 Waverley St. 132-12-004 2434 Waverley St. 132-12-006 2460 Waverley St. 132-12-008 2490 Waverley St. 132-12-009 2508 Waverley St. 132-12-010 2510 Waverley St. 132-13-067 2600 Waverley St. Assessment Principal 4,550.00 3,921.00 4,450.00 6,057.00 3,563.00 4,950.00 4,300.00 2,850.00 3,665.00 3,665.00 2,753.00 3,640.00 8,540.00 3,809.00 6,284.00 3,969.00 4,085.00 3,968.00 3,968.00 8,049.00 9,143.00 2,646.OO 4,550.00 4,044.00 4,503.00 3,456.00 5,266.00 4,764.00 4,391.00 4,008.00 4,884.00 6,591.00 4,515.00 6,050.00 4,928.00 6,826.00 5,451.00 3,699.00 2,648.00 TOTAL 178,399.00