HomeMy WebLinkAbout2023-01-24; City Council; ; Agreement with San Diego Gas & Electric to Move Aboveground Utility Lines on Valley Street and Magnolia Avenue UndergroundCA Review __RK__
Meeting Date: Jan. 24, 2023
To: Mayor and City Council
From: Scott Chadwick, City Manager
Staff Contact: Lauren Ferrell, Associate Engineer
lauren.ferrell@carlsbadca.gov, 442-339-2558
Hossein Ajideh, Engineering Manager
hossein.ajideh@carlsbadca.gov, 442-339-2756
Subject:
Agreement with San Diego Gas & Electric to Move Aboveground Utility
Lines on Valley Street and Magnolia Avenue Underground
District: 1
Recommended Action
Adopt a resolution authorizing the City Manager to execute an agreement with San Diego Gas &
Electric, to perform Rule 20A aerial-to-underground conversion of overhead utilities on Valley
Street and Magnolia Avenue for an estimated amount of $2,844,592.
Executive Summary
The City Council is being asked to execute an agreement under which SDG&E would move
electrical and telecommunication lines from overhead to underground on parts of Valley Street
and Magnolia Avenue and a portion of Brady Circle.
This utility undergrounding work needs to be completed as part of the Valley and Magnolia
Complete Streets Project, Capital Improvement Program Project No. 6019, specifically, the
utility poles need to be removed so new sidewalks can be installed.
A credit the city received from the California Public Utilities Commission’s Rule 20A
undergrounding program will cover part of the costs of the project.
The City Council’s approval for this project is required because the proposed agreement with
SDG&E is in an amount not to exceed $2,844,592, and Carlsbad Municipal Code Section
3.28.060(D)(5) requires the City Council’s approval of agreements that will cost the city
$100,000 or more per agreement year.
Staff recommend that the City Council adopt the proposed resolution, Exhibit 1, authorizing the
City Manager to execute the agreement with SDG&E.
Explanation & Analysis
Background
The Rule 20A program, established in 1983, provided that certain funds would be set aside each
year by SDG&E to pay for the undergrounding of existing utility lines.
Jan. 24, 2023 Item #2 Page 1 of 13
In 1988, the City Council established Council Policy No. 41 on undergrounding overhead
utilities. The policy, consistent with Rule 20A, stated the city’s guidelines and desires on
selecting or prioritizing underground projects.
The City Council formed an underground utility district in 2015 to move overhead utility lines to
an underground system, in accordance with Carlsbad Municipal Code to Chapter 11.08 -
Underground Utility Districts.
The boundaries of this district, named Underground Utility District No. 20, cover (See Location
map, Exhibit 2):
• Valley Street between Chestnut Avenue and Magnolia Avenue,
• Portions of Magnolia Avenue approximately 500 feet east of Valley Street and 110 feet
to the west
• Brady Circle from the intersection of Valley Street to approximately 150 feet west
The utility companies that convey electrical and telecommunication lines along this segment,
and who are involved in this project, are SDG&E, AT&T and Spectrum Charter Communications.
Complete Streets
Moving the existing overhead utilities underground and removing the utility poles is needed to
support the Valley and Magnolia Complete Streets Project, Capital Improvement Program
Project No. 6019. Complete Streets is an approach to designing streets that enables safe access
for everyone who needs to use them and all modes of travel. This project will make street
improvements within the city right-of-way along both sides of Valley Street from Chestnut
Avenue to Magnolia Avenue, and on the north side of Magnolia Avenue from Valley Street to
approximately 500 feet east of the intersection.
These improvements will provide:
• New sidewalks, curbs and gutters
• Pedestrian curb ramps
• Improved conditions for bicyclists and pedestrians
• Additional lighting
Project details
The undergrounding work to be carried out by SDG&E will consist of:
• Digging a trench about 5 feet deep and 2.5 feet wide along the public right-of-way
• Installing conduit, cable and substructures, along with aboveground facilities, such as
electric transformer boxes and telecommunication equipment pedestals1
• Removing existing overhead utility lines and poles
• Upgrading utility poles or installing new ones at the boundaries of the project as needed
for the transition to the new underground system
• Relocating an SDG&E gas main line and service lines beneath Magnolia Avenue, east of
Valley Street
Individual customer connections will be made by boring laterally, underground from the main
line in the right of way to install conduit and cable. If lateral boring is not feasible, open
1 These are plastic cylinders, about 2- or 3-feet tall, that house the equipment.
Jan. 24, 2023 Item #2 Page 2 of 13
trenches approximately 2 feet deep and 2 feet wide will be dug, with surfaces restored to pre-
existing conditions when the work is completed.
Three properties will be required to upgrade their electric service panel; they have been
notified by mail. Some properties may need to have installation of conduit and a junction box
installed on their exteriors. SDG&E will make that determination and make the necessary
installations.
Fiscal Analysis
This project is to be partially funded by the California Public Utility Commission Rule 20A
funding program, which allowed funds to be set aside each year by SDG&E to pay for
undergrounding existing overhead electric facilities. The city has accumulated $1,729,513
through this program.
The commission issued a decision in 2021 that significantly revised the Rule 20A program,
discontinuing allocations for Rule 20A electric projects carried out after April 2022. Due to this
ruling, the city will receive no additional revenue from the program. Because Underground
Utility District No. 20 was created by the City Council before that cut-off date, it is approved to
receive the city’s available credit from the Rule 20A program
Total construction costs are estimated to be $3,643,510. This is more than what is available in
the city’s Rule 20A work credit allocation fund, so the remaining balance of $1,913,997 is to be
paid by the funds set aside for the Valley & Magnolia Complete Streets Project, Capital
Improvement Program Project No. 6019. Sufficient funding has been appropriated from the
Traffic Impact Fee and TransNet funds for the remaining costs.2
Summary of costs and funding
Valley & Magnolia Complete Streets Project
Capital Improvement Program Project No. 6019
Total appropriation to date $4,736,206
Total expenditures and encumbrances to date $484,105
Total available balance $4,252,101
Total estimated SDG&E undergrounding costs
Construction contract (estimated) $2,844,592
Construction contingency (estimated) $568,918
Construction management, inspection, testing, public outreach (estimated) $230,000
Total estimated construction costs $3,643,510
Costs paid by Rule 20A work credit allocation balance $1,729,513
Remaining balance to be paid by the city from CIP Project No. 6019 $1,913,997
Remaining balance in CIP Project No. 6019 $2,338,104
Additional appropriation requested $0
2 TransNet is a countywide sales tax collected to fund regional transportation projects.
Jan. 24, 2023 Item #2 Page 3 of 13
SDG&E’s estimated cost is approximate, and the actual costs incurred by SDG&E will be
computed upon completion of the work. The city will be responsible for paying SDG&E’s actual
costs.
Carlsbad Municipal Code sections 3.28.040(C)(5) and 3.28.090(B) authorize the City Manager or
designee to approve change orders in an amount equal to the contingency set at the time of
project award, which, for this project, is $568,918.
Community Engagement
City staff have coordinated with the residents and adjacent schools about the undergrounding
and future construction. Staff prepared mailers with fact sheets to inform them about the
project, in keeping with the procedures detailed in Carlsbad Municipal Code Section 11.08.070 -
Notice to property owners and utility companies. In addition, the city, along with SDG&E, has
held several coordination meetings with representatives of the Carlsbad Unified School District
and North County Academy, the school at the corner of Valley and Magnolia.
Options
Staff provide the following options for the City Council’s consideration:
1. Authorize the City Manager to execute an agreement with SDG&E to perform Rule 20A
utility aerial-to-underground conversion on Valley Street and Magnolia Avenue in an
estimated amount of $2,844,592
Pros
• Provides a cost-effective and fast solution to underground existing
telecommunication and electrical facilities consistent with Council Policy No. 41
• Eliminates the need for a city-managed project design, solicitation and capital
construction effort that would most likely exceed SDG&E costs
• Provides cost savings in design, construction and material costs
• Sufficient funding is available for the contract
Cons
• None identified
2. Do not authorize the City Manager to execute the agreement with SDG&E
Pros
• None identified
Cons
• Does not allow the city to realize cost savings on design, construction and
material costs
• Requires concerted efforts on multiple contracts to execute design and
construction services
• Delays undergrounding of electrical and telecommunication lines
• Delays implementation of the underlying Capital Improvement Program Project
No. 6019, which would likely increase project delivery costs
Staff recommend Option 1.
Jan. 24, 2023 Item #2 Page 4 of 13
Next Steps
Upon receiving the City Council’s authorization, the City Manager will execute an agreement
with SDG&E to perform utility aerial-to-underground conversion. SDG&E plans to complete
their design and permitting process, bid and award a construction contract in spring 2023.
SDG&E estimates that construction will begin in June 2023 upon completion of the school year
to minimize traffic impacts associated with construction. Trench and conduit construction is
estimated to be completed by mid-August 2023 before the fall school year starts. Additional
construction activities will occur past August 2023, but work will be minor in nature with
minimal impacts to the school.
Environmental Evaluation
The City Planner has determined that project is exempt from the California Environmental
Quality Act under Guidelines Section 15302(d), which covers replacement or reconstruction of
existing structures and facilities, including the conversion of overhead electric utility
distribution system facilities to underground when the surface is restored to the existing
condition, and where the new structure will be located on the same site have substantially the
same purpose and capacity; and where the existing public structures and facilities involve
negligible or no expansion and no exception to the exemption as set forth in CEQA Guidelines
Section 15300.2 applies.
Exhibits
1. City Council resolution
2. Location map
Jan. 24, 2023 Item #2 Page 5 of 13
RESOLUTION NO. 2023-032
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, AUTHORIZING THE CITY MANAGER TO EXECUTE AN
AGREEMENT WITH SAN DIEGO GAS & ELECTRIC TO PERFORM RULE 20A
AERIAL-TO-UNDERGROUND CONVERSION OF OVERHEAD UTILITIES ON
VALLEY STREET AND MAGNOLIA AVENUE
WHEREAS, in 1983, the California Public Utilities Commission instituted the Rule 20A funding
program, which provided that certain funds are set aside each year by San Diego Gas & Electric, or
SDG&E, to pay for undergrounding of existing utility lines; and
WHEREAS, in 1988, Council Policy No. 41 was established on undergrounding overhead utilities,
which is consistent with Rule 20A and provides guidelines and desires on selecting or prioritizing
undergrounding projects; and
WHEREAS, on Nov. 17, 2p15, the City Council adopted Resolution No. 2015-280, creating
Underground Utility District No. 20 pursuant to Chapter 11.08 of the Carlsbad Municipal Code,
associated with the Valley and Magnolia Complete Streets Project, Capital Improvement Program
Project No. 6019; and
WHEREAS, relevant portions of the project includes Valley Street between Chestnut Avenue
and Magnolia Avenue, and a portion of Magnolia Avenue approximately 500 feet east and
approximately 110 feet west of Valley Street, and approximately 150 feet of Bradley Circle; and
WHEREAS, SDG&E, AT&T, and Spectrum Charter Communications are the utility companies that
have facilities on the existing poles that convey telecommunication and electrical lines within the
subject segment of Valley Street and Magnolia Avenue; and
WHEREAS, the City Council of the City of Carlsbad has determined the public health, safety or
welfare requires removal of the poles, overhead wires and associated overhead structures, and
underground installation of wires and facilities for supplying electric, communication or similar or
associated service within the project area; and
WHEREAS, undergrounding of overhead utilities for this project is consistent with Council Policy
No.41;and
WHEREAS, SDG&E has provided the city with an estimated cost to design, construct, place
conduit, place cables, in the street public right-of-way and to the customers' service point, remove
poles and overhead cables, and place new poles at the boundary of the underground district, where
Exhibit 1
Jan. 24, 2023 Item #2 Page 6 of 13
determined necessary for the transition from the existing aerial system to the new underground
system, and relocate approximately 1,500 feet of gas main line; and
WHEREAS, SDG&E's construction cost for the undergrounding effort is estimated to be
$2,844,592, which does not include construction contingency and construction management and
inspection costs; and the total construction cost, including construction contingency amount of
$568,918 and construction management and inspection costs of $230,000, is estimated to be
$3,643,510; and
WHEREAS, SDG&E's estimated cost is only approximate, and that the actual costs incurred by
SDG&E will be computed upon completion of the work, for which the city is responsible for payment
of SDG&E's actual costs; and
WHEREAS, proceeding in this fashion eliminates the need for a city-managed project design,
solicitation and capital construction effort that would: (i) exceed SDG&E's costs, (ii) delay
undergrounding of telecommunication and electrical lines, and (iii) delay completion of the underlying
CIP Project No. 6019; and
WHEREAS, the project is partially funded by the Rule 20A funding program, which provides that
certain funds are set aside each year by SDG&E to pay for undergrounding existing overhead electric
facilities, and for which the city's current Rule 20A work credit allocation balance is $1,729,513; and
WHEREAS, the city's Capital Improvement Program budget will cover the remaining estimated
balance of $1,913,997, of which $1,683,997, including $568,918 for construction contingency, is to be
paid to SDG&E for actual costs and $230,000 is to cover construction management and inspection
costs; and
WHEREAS, sufficient funding is available in Capital Improvement Program Project No. 6019; and
WHEREAS, Carlsbad Municipal Code sections 3.28.040(C)(S) and 3.28.090(8) authorize the City
Manager or designee to approve change orders in an amount equal to the contingency set at the time
of project award, which is $568,918 for this project; and
WHEREAS, the City Planner has determined that the project is exempt from the California
Environmental Quality Act under CEQA Guidelines Section 15302(d), which covers replacement or
reconstruction of existing structures and facilities, including the conversion of overhead electric utility
distribution system facilities to underground when the surface is restored to the existing condition, and
where the new structure will be located on the same site have substantially the same purpose and
Jan. 24, 2023 Item #2 Page 7 of 13
capacity; and where the existing public structures and facilities involve negligible or no expansion and
no exception to the exemption as set forth in Guidelines Section 15300.2 applies.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1.That the above recitations are true and correct.
2.That the City Council authorizes the City Manager, or designee, to execute an agreement
with SDG&E to perform Rule 20A aerial-to-underground conversion of overhead utilities
along Valley Street and Magnolia Avenue, attached as Attachment A.
3.That the City Council authorizes the City Manager or designee to approve change orders
in an amount equal to the contingency set at the time of project award, which is
$568,918 for this project.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 24th day of January, 2023, by the following vote, to wit:
AYES:
NAYS:
ABSTAIN:
ABSENT:
Blackburn, Bhat-Patel, Acosta, Burkholder.
None.
None.
None.
KEITH BLACKBURN, Mayor
Jan. 24, 2023 Item #2 Page 8 of 13
J.-rr----SHERRY FREISINGER, City Clerk
U {SEAL)
1 FORM 106-2759L (4/91)
-
Submitted to Applicant by:
SDG&E Work Order(s):
AGREEMENT FOR REPLACEMENT OF OVERHEAD
WITH UNDERGROUND FACILITIES
THIS AGREEMENT, made and entered into, by and between SAN DIEGO GAS & ELECTRIC
COMPANY, a corporation, hereinafter called “Utility”, and THE CITY OF CARLSBAD, hereafter called
“Applicant(s)”.
WITNESSETH:
WHEREAS, Applicant(s) are the owners, lessees, or others having a legal interest in
those certain premises known as the Valley & Magnolia Rule 20A Conversion Project located at certain
areas of Valley Street and Magnolia Avenue; and
WHEREAS, Applicant’s desire that existing overhead facilities be replaced with
underground facilities, and in consideration of the desirability and value which said underground facilities
will add and contribute to the above premises;
NOW, THEREFORE, it is agreed by and between Utility and Applicants as follows:
1.Subject to the conditions hereinafter provided, Utility, upon obtaining satisfactory easements for any
required rights of way, shall remove its existing overhead electric power facilities serving Applicants
and shall replace these facilities with underground facilities, in accordance with its Rule 20.A for
Replacement of Overhead with Underground Facilities as filed with the California Public Utilities
Commission.
2.All work performed by the Utility and Applicants pursuant to this Agreement shall be in conformity with
the General Conditions and the Specifications attached hereto and by this reference made a part
hereof. Utility shall furnish underground electric service to the premises shown on Specifications and,
upon completion of the work specified herein, Utility shall not furnish overhead electric service to any
of such premises.
3.This Agreement shall become effective only upon compliance with all of the following conditions:
a)All Applicants shall execute this Agreement and shall perform all of the conditions herein
contained.
b)All Applicants shall execute a companion agreement with each company, municipality, or
agency that is a joint user with Utility of poles, or maintains other poles, within the area from
which Utility’s pole will be removed pursuant to Section 1, for providing communication
service, traffic signals, police or fire alarm boxes, or street or safety lighting supplied by
overhead wiring. Such agreement or agreements will provide for such service to be
discontinued or converted and maintained through underground circuits or other appropriate
and lawful means, so that all of said poles can be removed from the area within a reasonable
time after Utility has removed its poles.
c)Applicants will, at their expense and in conformity with the Contract Documents as defined in
the General Conditions, furnish and install the material, and facilities and perform the work
indicated below by a check mark. The material, facilities and work listed below which are not
indicated with a check mark shall be furnished, installed and performed by Utility at
Applicants’ expense.
Attachment A
Jan. 24, 2023 Item #2 Page 9 of 13
sos/' .. .,.,/E
A ~ Sempra Energy u1,111y·
2 FORM 106-2759L (4/91)
Excavation, backfill and compaction
Conduits
Concrete substructures
d)Utility shall notify Applicants, in writing, of final acceptance of the work specified herein.
Applicants hereby grant to Utility all facilities installed by Applicants pursuant to this
Agreement, said grant to be effective upon receipt of Utility’s written final acceptance.
e)Each Applicant shall, at his expense, promptly provide any necessary changes to the existing
facilities on his property so as to receive underground electric service at the points specified
on the Specifications. The Applicants’ work shall be in accord with Utility’s Rule on Service
Connections filed with the California Public Utilities Commission effective as of the date of
this Agreement, and in accord with the Contract Documents. Underground electric service
will not be supplied until all affected premises are equipped to receive electric service in
accordance with said plan and specifications.
4.The entire undergrounding work is estimated to cost $2,844,592 (which equates to $3,413,510
with 20% construction contingency). The city’s current Rule 20A work credit balance is
$1,729,513. Applicant(s) will utilize its available Rule 20A Work Credits to fund this work, and the
remainder of the costs associated with the Project will be paid for by Applicant(s) as follows:
payment via check made out to SDG&E and mailed to the address listed on the attached Cost
Remittance. Receipt is acknowledged from Applicant(s) of $1,683,997, which is an amount equal
to the estimated cost of the Utility's conversion work (including 20% contingency), less the City's
available Rule 20A Work Credits, in accordance with its Filed Rule on Replacement of Overhead
with Underground Facilities.
Said amount includes any engineering fee or fees that have been paid to Utility in contemplation of the
work provided in Section 2.
The conversion work will be tracked and billed on an actual cost basis, meaning that all costs will be reconciled
at completion of the work and SDG&E will bill or refund to Applicant any differences larger than $100.
5.In the event any additions, rearrangements, or changes to the electric wiring are required or
performed on Applicants’ several premises, other than the work pursuant to Section 3.e) above,
Applicants shall cause said additions, rearrangements, and changes to be made at their expense.
6.All wires, cables, conductors, conduits, ducts, connectors, and appurtenances installed by Utility, or its
agents, on the premises of Applicants, or elsewhere, and all facilities granted to Utility by Applicants,
shall become and remain the property of Utility notwithstanding any payment made under this
Agreement. Such facilities will be maintained and operated by Utility in accordance with its Rules for
the Sale of Electric Energy on file with the California Public Utilities Commission.
a)Utility shall be under no obligation to perform and complete the work undertaken by it
pursuant to this Agreement until Applicants’ obligations incurred pursuant to Paragraphs 3.b)
and 3.e) of this Agreement shall have been fulfilled.
b)If the Specifications attached hereto require the installation of new street lighting standards,
Utility shall be under no obligation to remove and cease operating its overhead electric
facilities nor to furnish underground electric service to any of the premises shown on the
Specifications until said street lighting standards have been installed and energized.
c)Utility at its sole election, may undertake to perform the work to be performed by it prior to the
occurrence of the conditions specified in section 7. and subsection b) of this Section. The
commencement of any such work by Utility under the provisions of this subsection shall not
constitute a waiver of any of the requirements imposed upon any Applicants under section 7.
or subsection b) of this Section, or under any other provisions of this Agreement.
d)If any Applicants shall, within one year of the date of this Agreement, fail or refuse to comply
with any of the conditions hereof or to perform all work required under the contracts executed
pursuant to Paragraph 3.b) of this Agreement, Utility shall have the right to make such
changes and to impose such further conditions upon the Applicants as may be necessary to
protect its rights under any existing agreement for any increase in its costs of installation, and
to provide in any other manner for the accomplishment of the purposes of this Agreement
consistent with applicable rules, laws, ordinances and its contractual obligations hereunder.
Jan. 24, 2023 Item #2 Page 10 of 13
□
□
□
3 FORM 106-2759L (4/91)
7.Once Applicant has started to perform the work required by the Contract Documents, Applicants agree
to exercise reasonable diligence in pursuing such work to completion within one year after the
effective date of the Contract Documents. If such work has not been completed within one year after
the effective date of the Contract Documents, Utility shall have the right, upon giving written notice to
Applicants, to cancel and terminate the Contract Documents. Utility shall return to Applicants, an
amount equal to the above cash advance, minus Utility’s costs. Utility’s costs are defined as the
actual cost (including but not limited to labor, materials and overhead) incurred by Utility prior to such
cancellation and termination in connection with work done in furtherance of Applicants’ project, plus the
actual cost of removing any of the Utility installed facilities which Utility desires to salvage, minus the
salvage value of such facilities. Upon exercise of this right to cancel and terminate, and upon payment
to Applicants, all of Utility’s obligations under the Contract Documents shall cease.
8.This Agreement shall at all times be subject to such changes or modifications by the California Public
Utility Commission as said Commission may, from time to time, direct in the exercise of its
jurisdiction.
9.All terms and situations heretofore made and agreed to by the parties in relation to said electric line
replacement are set forth in this Agreement and no representation of any agent or employees shall be
binding upon Utility except as expressed herein. Appendix A attached hereto is solely for use by
Utility and nothing contained therein shall in any way alter or vary any term, condition or stipulation
contained in this Agreement.
10.If Applicant is a corporation, partnership, joint venture or a group of individuals, the subscriber hereto
represents that he has the authority to bind said corporation, partners, joint venture or individuals as
the case may be. Each Applicant signing this Agreement agrees that he shall be jointly and severally
liable under the terms of this Agreement with every other applicant signing the Agreement.
11.All of the terms and conditions of this Agreement shall be binding upon and shall insure to the benefit
of the parties hereto, their heirs, administrators, executors, personal representatives, trustees,
successors and assigns.
12.The Contract Documents shall become effective only upon the date signed by the authorized
representative of Utility.
Jan. 24, 2023 Item #2 Page 11 of 13
IN WITNESS WHEREOF, the parties hereto have individually executed, or have caused
this Agreement to be executed for and on behalf of each, by and through their responsible agents,
partners, or authorized corporate officers, as the case may be.
APPLIC
Title: _G~l~~--J'\~M"i~"-----i't-¥~--
Date: _ __.,2fh:A.==--..._t:..;::-..,a£.,.,~------
Telephone: _
APPROVED AS TO FORM
Cindie K. McMahon, City Attorney
Bii;~Attomey
City ol Carllbad. California
Jan.24,2023
4
SAN DIEGO GAS & ELECTRIC COMPANY,
a corporation
By: _____________ _
(Authorized Individual-Utility)
Date Executed:
FORM 106-2759L (4/91)
Item #2 Page 12 of 13
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VICINITY MAP
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Exhibit 2
Jan. 24, 2023 Item #2 Page 13 of 13