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PUBLIC HEARINGS AND OTHER MATTERS 11. Consider adoption of a Resolution of Intent for the formation of an Underground Utility District along Stanley Boulevard from First Street to Santa Rita Road, CIP No. 055022 City Manager Fialho reviewed the current Stanley Boulevard improvement project, noting that it does not include the undergrounding of overhead utilities. The public questioned that exclusion in August of 2008 at which point the City Council directed staff to investigate the possibility of moving forward with that inclusion. City Engineer Jim Kelcourse reviewed the standard procedure for undergrounding public utilities through the formation of underground utility districts. District formation is governed by the City's own Municipal Code as well the California Public Utilities Commission (CPUC), particularly Rules 20A and 206 which are designed to ensure that the undergrounding of public utilities does not represent an undue burden for the utility companies and, in turn, ensures that burden is not passed on to its customers. The formation of districts requires a public hearing; a finding of public necessity by the City Council; that all properties and utilities with the district underground their existing public utilities; that future construction within the district will be undergrounded; and that the district limits be defined. As part of these requirements, cooperation between residential and commercial property owners is essential and in this situation would include PG&E, AT&T, Comcast, and the City of Pleasanton. Mr. Kelcourse outlined additional costs associated with the project which while not yet defined, would add another $2.5 to $3 million to the Streetscape Improvement Project. If the City Council would like to proceed with the undergrounding project, staff proposes using $400,000 of the $2 million already set aside for the Streetscape Improvement Project for project design and PG&E approval. Staff projects that the timeframe on these steps plus project bid would take 1.5 to 2 years at which point in time the City Council could provide direction on further funding. Staff has determined that undergrounding of utilities is consistent with the Downtown Specific Plan recommendations, improves aesthetics, increases property values, provides more reliable utility services, and eliminates tree trimming for overhead wires. Given the nature of construction activities involved with undergrounding, it is recommended that it be performed prior to the repaving scheduled as part of the Streetscape Improvement Project. Impacts associated with undergrounding include disruption to traffic during construction, temporary inconvenience of access to private property, temporary outage of power and communications during the transition from overhead to underground service, potential cost of conversion to property owners, and the projected 3 year delay to current roadway streetscape improvements. Staff met with the public in November 2008 to outline the impacts; the overwhelming majority of those in attendance were in support of the project. At this time, staff recommends that the City Council receive public input and if it deems appropriate, initiate proceedings to form an underground utility district. Staff also recommends that the City Council then authorize the use of the existing Stanley Boulevard Streetscape Improvement Project funds for the undergrounding and then codify it by combining the two projects. Vice Mayor Cook-Kallio asked why this project would not qualify for use of future Rule 20A funds. Mr. Kelcourse likened Rule 20A funds to frequent flyer miles and explained that the only provision allowing PG&E to use Rule 20A in place of 20B is in the event that we ask them to do design work and then default. City Council Minutes Page 3 of 5 March 17, 2009