HomeMy WebLinkAboutStaff Report 7193
City of Palo Alto (ID # 7193)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 12/5/2016
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Summary Title: Approval of a Budget Amendment in the Electric Fund for
Underground Utility District Number 47
Title: Approve a Budget Amendment in the Electric Fund to Complete
Conversion of Overhead Electric Facilities to Underground for Capital Project
EL-11010 Underground Utility District 47 Increasing the Project From
$2,346,000 to $2,946,000; and Finding of CEQA Exemption Pursuant to
Guideline Section 15302
From: City Manager
Lead Department: Utilities
Recommendation
Staff recommends that the City Council:
1) Amend the Fiscal Year 2017 Budget Appropriation Ordinance for the Electric Fund by:
a) Increasing the Capital Improvement Project Underground Utility District No. 47
(EL-11010) appropriation in the amount of $600,000; and
b) Decreasing the Electric CIP Reserve appropriation in the amount of $600,000
2) Adopt a Categorical Exemption under Section 15302 of the California Environmental Quality
Act.
Background
Underground Utility District No. 47 (“UUD 47”) involves converting the overhead utility lines to
underground in the Area of Middlefield Road, Homer Avenue, Webster Street, and Addison
Avenue. In March 2015, construction began with the installation of conduits and vaults after
the City Council approved and authorized the execution of contract with MP Nexlevel of
California, Inc. (Staff Report #5469). MP Nexlevel has completed installation of substructures
for electric, communication, telephone and cable television systems. The City has received
reimbursement of $1,100,000 from AT&T and Comcast for work performed by MP Nexlevel on
their facilities.
The next step is construction of Utilities’ underground electric system and eventual removal of
overhead facilities. Staff’s latest cost estimates for construction of the underground systems
and connection of customer services, are higher than originally budgeted in 2011. Therefore,
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staff is requesting additional funding of $600,000. The additional funding will allow for the
purchase of electric equipment, streetlighting poles, cables, and labor for completion of the
electric installation work for the underground distribution system for UUD 47.
Discussion
The original estimate for the conversion of the overhead utility system to underground was
developed, based on actual costs from past projects, and used for budget approval. In April
2016, Council approved a Budget Amendment Ordinance (Staff Report #6631) in the amount of
$96,000, to fund additional unforeseen work related to the installation of substructures for this
project, which increased the approved budget funding for the project to $2,346,000.
It was anticipated that the remaining funding in the budget was adequate for completion of the
project. Upon further review and completion of the estimate for electric construction it was
determined that additional funding was necessary. Several factors affected the cost of the
project resulting in this request for additional funding.
1. For previous undergrounding projects, internal Utilities staff inspected the installation of
substructure work. However, during the construction phase of UUD 47, Electric Operations
expressed their inability to provide an inspector due to shortage of manpower. Electric
Operations had a significant amount of construction work including on-going system
improvement projects and other large commercial projects in the Stanford Medical Center
area.
This necessitated the usage of third party inspection services by Canus Corporation
(“Canus”) to inspect the underground substructure installation. The city has a blanket
contract with Canus to provide inspection services on an as-needed basis. Canus has been
providing inspection services on Electric, Water, Gas, Wastewater, and Public Works
projects for the past several years.
By utilizing Canus Corporation’s services, Utility Department incurred an expenditure of
approximately $195,000 on inspection services, approximately twice the cost of using
internal staff.
2. Since the original estimate was developed, the cost of material (switches, transformers and
associated cables) and labor have increased by approximately 20% and 15% respectively.
3. Changes made in the original design for optimizing reliability of the electric distribution
system and addition of unforeseen items also added to the total cost of the project.
Staff’s assessment, for procuring and installing electric equipment, energizing the new
undergrounding electric distribution system, connecting customers to the new system, and
removing the overhead system for UUD 47, indicates we will require an additional amount of
$600,000 to complete UUD 47.
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Resource Impact
A budget amendment is required in the amount of $600,000, to add funds to CIP EL-11010 and
decrease funds from the Electric CIP Reserve. This amount will increase the total authorized
budget of CIP EL-11010 from $2,346,000 to $2,946,000.
Policy Implications
This project supports City of Palo Alto 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.
Timeline
Substructure installation work pertaining to UUD 47 is complete. Adding money to WBS EL-
11010 will allow for procurement of materials, and completion of electric system construction,
with an anticipated completion of the new underground system by December 31, 2017.
Environmental Review
This project is categorically exempt from the California Environmental Quality Act under Section
15302(d) of the California Code of Regulations, Title 14, Chapter 3 (conversion of overhead
electric utility facilities to underground).