Title
Introduction of Ordinance Amending Alameda Municipal Code Chapter XIX, Section 19-4 (Underground Utility Districts) to Approve the Redesigned Underground Utility District Policy. (Alameda Municipal Power)
Body
To: Honorable Mayor and Members of the City Council
From: John A. Russo, City Manager
Re: Introduction of Ordinance Amending Alameda Municipal Code Chapter XIX, Section 19-4 (Underground Utility Districts) to Approve the Redesigned Underground Utility District Policy
BACKGROUND
The City of Alameda established Ordinance No. 2212, on September 18, 1984, creating regulations and procedures for removing overhead utility facilities and installing underground facilities by means of underground utility districts. An undergrounding Technical Advisory Committee (TAC), headed by Public Works and including a member from each overhead utility, was established to determine the implications of underground conversion and identify underground districts in Alameda.
The City Council, on November 5, 1985, adopted Resolution 10774 establishing the first utility underground district (UUD). The project parameters became the template for ensuing districts. Those parameters consisted of utilities placing overhead main lines and service lines, including electricity, telephone, cable television, and other telecommunications underground in a joint trench. Alameda Municipal Power (AMP) was directed to allocate 2% of revenues each year for its underground fund.
The Public Utilities Board (PUB) at its May 21, 2012 meeting approved discontinuing work on Phase 6 of the Underground Utility District Program and tasked staff with redesigning the undergrounding process due to concerns voiced by citizens and PUB members. The City Council accepted the PUB's recommendation on July 7, 2012 and directed staff to develop an Underground Utility District (UUD) Master Plan (Exhibit 2) that includes the following inter-connected elements:
1. Prioritization
a. Review and revise the City's utility undergrounding criteria; and
b. Develop a prioritization framework (tiering) and differentiation between City initiated projects (high public benefit to many) and customer/group initiated projects (high private benefit).
2. Public Participation
a. Institute a Redesign Committee made up of concerned citizens, civic group representatives, city employees and/or possibly PUB member(s) to engage in the UUD program redesign; and
b. Develop a process for customer input for both City initiated projects and customer/group initiated projects.
3. Financial Obligations
a. The Master Plan should develop recommendations related to financial obligations of both customers and the UUD fund depending on type of project;
b. Develop recommendations related to utilization of a master contractor, service lateral ownership and conversion costs, and provision of a maintenance insurance program; and
c. Develop financial assistance programs, as applicable.
4. Implementation
a. Define the roles and responsibilities of various City departments.
AMP staff has continued to analyze and develop the revised program through research, focus groups and directed outreach to other city agencies and community members. The research included contacting five cities and Publicly Owned Utilities (POUs) who either had, or currently have active utility undergrounding programs to gather information on their processes and implementation strategies.
Beginning December 11, 2013, AMP convened the first of two focus group meetings with city and community stakeholders to review, evaluate and revise the UUD district criteria and prioritization process and develop a recommendation for the PUB and City Council's approval. This group developed a prioritized list of seven criteria. AMP staff refined the criteria and developed objective metrics that could be used to score each of these criteria.
On May 13, 2014, AMP conducted a financial task force meeting with representatives from the city and community to discuss UUD financing alternatives and their implications.
On November 6, 2014, AMP conducted a Town Hall meeting to present the proposed revised UUD Policy and collect feedback. Over 50 people attended this meeting. Those in attendance were in general support of the proposed policy and expressed interest in the program starting as soon as possible.
On December 8, 2014, AMP staff presented the draft UUD Policy for PUB recommendation to the City Council. At that meeting, the PUB asked staff to consider input from two public speakers regarding a clarification of the aesthetics criteria and the consideration of including a prescriptive clause that would allow residents to exempt their neighborhoods either temporarily or permanently from becoming a UUD.
On January 26, 2015, AMP staff presented a revised draft of the UUD Policy for PUB recommendation to the City Council. Staff made some modifications to the aesthetics criteria but recommended no prescriptive clause to allow residents to opt-out of the UUD program as it would introduce significant legal issues and most likely change the basic nature of the ordinance. The PUB approved the revised UUD Policy asking only that additional wording be included with Policy statement #2 which makes clear residents can not exempt their neighborhoods from the UUD program.
DISCUSSION
The purpose of redesigning the UUD Policy (Exhibit 1) is to provide greater benefits to customers, the community, and the City. The revised program will demonstrate fiscally responsible use of the Underground Utility District Fund (UUDF) and establish a fair, objective, and transparent UUD prioritization process.
Prioritization
Instead of mapping out the entire city at the start of the program, a District Nomination Board (DNB) is responsible for the initial nomination of proposed districts. The DNB will be led by the AMP project manager and shall be comprised of at least one additional member of the Public Works department and up to three members of the public who are appointed to the DNB. The DNB will exist for the sole purpose of discerning and recommending a set of UUDs for Technical Advisory Committee (TAC) consideration. The TAC will be led by the AMP project manager and shall be comprised of at least one additional member of Public Works and each of the participating utilities (e.g. Comcast, AT&T). Upon the TAC's acceptance of the DNB's recommendation, the DNB function will conclude until a new DNB is formed for future UUD recommendations.
The advantages of this approach are:
· Since undergrounding the entire city could take 70 years or more, any list developed now would likely need to be revised to meet future needs;
· It will provide greater flexibility for guiding the work to areas with the greatest benefit and allows an easier alignment with current City needs or initiatives;
· It includes public participation in identifying UUDs;
· It helps to align public conversation on the composition and priority of the proposed districts by only focusing on a few districts at a time;
· It makes it easier to revise criteria for proposing districts based on lessons learned from previous districts or changing City priorities; and
· This process can be accelerated by repeating the cycle more frequently (such as on an annual basis) or increasing the number of proposed districts.
A key to establishing a fair and transparent process is developing objective criteria that can be used to help prioritize proposed districts. The proposed scoring criteria were developed in conjunction with city and community stakeholders and are divided into two tiers. Tier 1 contains criteria that reflect the three criteria (heavy concentration of aerial facilities; heavy volume of pedestrian or vehicular traffic; and civic, recreational, or scenic area) established by the CPUC for public benefit in Rule 20A but are characterized more specifically to reflect localized Alameda drivers. In addition, Tier 1 also includes the replacement of deteriorated facilities. Tier 2 criteria include three criteria that also denote public benefit but characterize more regional conditions on the island. Tier 1 criteria are weighted higher in the score card so that districts with the greatest public benefit should score higher than districts with less public benefit. Districts which do not meet any of the three CPUC criteria but are proposed and primarily funded by an individual or group will still be considered for prioritization within the Tier 1 and 2 frameworks.
The DNB will score proposed districts and pass the list of proposed districts to the Technical Advisory Committee (TAC).
The TAC performs a technical review of the proposed districts and defines the exact boundaries of each proposed district. Based on their analysis and any other relevant factors, such as current City priorities, amount of funding available, desired sequencing of undergrounding projects or adjacency to already undergrounded areas, the TAC identifies one to four districts to be considered for approval by the City Council.
Public Participation
AMP gathered input on how the project should be revised from the public through several focus groups and outreach as mentioned above.
Once implemented, the program will continue to involve public participation in the process by including up to three members of the public on the DNB, informing the public and collecting feedback during a town hall meeting presenting proposed UUDs, and through a formal survey of each customer impacted by the proposed UUDs. Feedback from the town hall meeting and the survey should provide clear indications of the level of support for the proposed district(s) and will be provided to the City Council along with the recommended UUDs.
Financial Obligations
Two issues arise related to financial obligations: 1) service lateral conversion costs and 2) service lateral ownership. The service lateral is the electrical conductor which connects the customer to AMP's distribution system. In the past, customers expressed concerns that conversion costs of any amount are a significant hardship and that ownership of the underground service lateral burdens them with significant economic risk should the service fail and/or the substructures be damaged.
This program aims to fund 100 percent of the conversion costs for 99 percent of the customers. Customers who, after consultation with AMP require underground services beyond the normal scope of the conversion project and/or have service routes that extend beyond 100 feet from the point of service (normally located at the sidewalk) may incur some additional cost.
Having the telecommunications providers (AT&T and Comcast) fund their portions of the conversions is dependent on AT&T determining that the proposed UUD(s) qualifies under CPUC Rule 32A.1 which match the first three criteria of the proposed policy for "Areas of General Public Interest and Benefit." All of the UUDs completed in Alameda in the past have been qualified as such.
Additionally, Rule 32 stipulates that, "upon request of the governing body the Company [Investor Owned Utility, i.e. AT&T/Comcast] will pay for the installation of no more than 100 feet of each customer's underground service connection facility occasioned by the undergrounding" and that, "the Company will pay for the installation of each customer's underground service connection facility at the time and only to the extent that the electric utility pays for the customer's underground electric service lateral." The revised UUD Policy would invoke this 100 foot rule when establishing UUDs through Ordinance. As such, telecommunications providers will be required to pay 100 percent of their conversion costs including costs associated with trenching and conduit (up to the100 foot limit). This is different from the past UUD Policy in which the customers paid 100 percent of the costs associated with trenching and conduit for the telecommunications providers.
No change in current policies for service lateral ownership is being proposed. The customer will own the underground service lateral from the service point to the meter panel. AMP owns only the meter on the customer's property. This means that the customer is responsible for any necessary maintenance and/or repair of the service lateral. Since repairs to underground utilities can be more expensive than overhead utilities, AMP will offer customers undergrounded under this revised program a maintenance insurance policy, managed by AMP, which would be included on their monthly bill. Cost of this insurance is to be determined but is estimated at $0.005/month for residential customers and $0.42/month for commercial customers and will cover the repair and/or replacement of their substructures and/or electric service conductor in the event of service conductor failure. Repairs due to damage from customer dig-ins will be billed back to the customer.
Implementation
AMP will serve as the lead City agency for implementing the City's UUD Policy. In this role, AMP will provide a UUD project manager, design services, electric substructure and equipment inspection services and assist the Master Contractor with construction coordination. At least one employee from Public Works will serve on the DNB and TAC to ensure coordination with City activities. In addition, at least one employee from Planning and Building Services, currently with the Community Development Department will provide panel conversion inspection services.
A single Master Contractor will be used to coordinate and install substructures and convert electrical service panels to accept underground electrical service. AMP staff anticipates that this strategy will lead to the lowest conversion costs and eliminate the need for customers to obtain and authorize their own conversions. Individual homeowners may, in consultation with AMP, employ their own contractor to trench, install substructures, and/or perform the meter panel conversion. However, costs for each of these tasks will only be reimbursed by the UUDF up to a pre-established limit equivalent to standardized costs incurred by the Master Contractor.
The redesign of the Underground Utility District Policy was undertaken because the existing program was not meeting the needs of the community, city, and AMP and was not providing the maximum public benefit. The key changes proposed in the redesigned program include:
· Criteria for selecting and prioritizing proposed districts have been quantified and prioritized.
· Defined scoring criteria creates a more transparent process for selecting districts.
· Conversion costs have been eliminated for the majority of customers.
· The process for gathering public input has been better defined.
· The plan proposes creating a maintenance insurance plan for customers' service laterals.
Upon City Council approval of the Underground Utility District Policy, staff will further define the UUD Program Master Plan to refine roles and responsibilities, staffing needs, proposed project lifecycle, and timeline for implementation. Upon completion, staff will update AMP's PUB with the completed Master Plan at an upcoming PUB meeting.
FINANCIAL IMPACT
The funds for this program are budgeted in the Alameda Municipal Power's account for Underground Utility District (UEL-2015-9400). There is no impact to the General Fund.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
Municipal Code 19-4 Underground Districts
RECOMMENDATION
Introduction of Ordinance Amending Alameda Municipal Code Chapter XIX, Section 19-4 (Underground Utility Districts) to Approve the Redesigned Underground Utility District Policy.
Respectfully submitted,
Glenn Steiger, General Manager, Alameda Municipal Power
By,
Douglas Draeger
AGM Engineering & Operations
Financial Impact section reviewed,
Juelle-Ann Boyer, Interim Finance Director
Exhibits:
1. Overhead to Underground Utility Conversions for the City of Alameda Policy
2. Draft City of Alameda UUD Program Master Plan
3. Revised Underground Utility District (UUD) Program Presentation
cc: Public Utilities Board