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BACKGROUND The Stanley Boulevard Improvement project has been in the works since 2002 when the Downtown Specific Plan was adopted. As originally planned, the project included street surface improvements consisting of curb, gutter, pavement, sidewalks, street lighting and landscaping. The project was estimated to cost $2.5 million. The funding to construct the street improvement project is currently available in the CIP, of which approximately half is restricted for use on the street improvements only. In 2008 the scope of the project was expanded by City Council to include the undergrounding of overhead utilities. At that time, staff was directed to design the Stanley Boulevard Utility Undergrounding project and a Stanley Boulevard Underground Utility District (UUD) under the PG&E Rule 20B program was created. The Utility Undergrounding project design was completed in 2010, but the $3.25 million of additional City funding needed for the undergrounding has not been identified. As an alternative to waiting for additional City funding, staff is now recommending PG&E Rule 20A be used as a potential funding source. This program requires that the City again conduct a public hearing to ascertain whether the public necessity, health, safety or welfare requires the removal of the poles, overhead wires and associated overhead structures, as well as the undergrounding of wires and facilities for supplying electric communication, or similar/associated services. The Rule 20A funding program also requires adoption of a resolution to form the Rule 20A UUD. On February 21, 2012, the City Council adopted Resolution Number 12-01 setting April 3, 2012, for a public hearing on the formation of Underground Utility District No. 12-01, Stanley Boulevard from Santa Rita Road to First Street. In addition to using Rule 20A funding for undergrounding of the overhead distribution lines and power poles within the public right of way, staff recommends the Rule 20A funds also be used to cover the service lateral trenching costs onto private property up to 100 feet from the street (100 Foot Rule) and to cover the any electrical panel conversion costs up to $1,500 per panel, as permitted under Rule 20A regulations. As mentioned, PG&E has stated that the current Rule 20A work queue is four years, so using these funds for the project means the work will not occur until 2016. Coincidently, based upon the City's annual allocation of Rule 20A program funds, four years are required to collect enough funds to construct the project. This means that even if the work queue was shorter, the project could not be constructed before 2016 because of this program's funding. Staff held a community meeting on January 26, 2012, to discuss this approach to accomplishing the undergrounding project. The people in attendance supported the creation of the Rule 20A District to get the Stanley Boulevard project in the queue, but they also requested that the City continue to look for other sources of funds that would allow the project to be constructed sooner, and not simply accept that four years would be the project schedule. Page 2 of 3