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2/24/2014MINUTES OF A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS, CALIFORNIA MONDAY, FEBRUARY 24, 2014 CALL TO ORDER A regular meeting of the City Council of the City of Rolling Hills was called to order by Mayor Hill at 7:32 p.m. in the City Council Chamber at City Hall, 2 Portuguese Bend Road, Rolling Hills, California. ROLL CALL Councilmembers Present: Black, Dieringer, Lay, Pieper and Mayor Hill. Councilmembers Absent: None. Others Present: Raymond R. Cruz, City Manager. Michael Jenkins, City Attorney. Yolanta Schwartz, Planning Director. Heidi Luce, City Clerk. Dave McKinnie, RHCA Board President. Joe Heitzler, RHCA Boardmember. Helen Frykman, RHCA Boardmember. Gian Starinieri, RHCA Boardmember. Marcia Gold, RHCA Boardmember. Kristen Raig, RHCA Manager. Sid Croft, RHCA Attorney. Toni Day, RHCA Administrator. Jeff Shellabarger, Southern California Edison, Rule 20 Project Manager. Marvin Jackmon, Southern California Edison, Region Manager. CONSENT CALENDAR Matters which may be acted upon by the City Council in a single motion. Any Councilmember may request removal of any item from the Consent Calendar causing it to be considered under Council Actions. A. Minutes - Regular Meeting of February 10, 2014. RECOMMENDATION: Approve as presented. B. Payment of Bills. RECOMMENDATION: Approve as presented. C. Financial Statement for the Month of January, 2014. RECOMMENDATION: Approve as presented. D. Allied Recycling Tonnage Report for January, 2014. RECOMMENDATION: Receive and file. E. Consideration of a nomination for the 66`h Assembly District's "2014 Women of Distinction." RECOMMENDATION: Approve as presented. Mayor Pro Tem Lay moved that the City Council approve the items on the consent calendar as presented. Councilmember Black seconded the motion, which carried without objection. COMMISSION ITEMS None. PUBLIC HEARINGS None. Minutes City Council Meeting 02/24/14 -1- OLD BUSINESS None. NEW BUSINESS JOINT STUDY SESSION WITH ROLLING HILLS COMMUNITY ASSOCIATON BOARD OF DIRECTORS ON UNDERGROUNDING OVERHEAD UTILITY LINES AND REMOVING UTILITY POLES. Study session in order to receive a presentation and promote a discussion regarding the issues and process associated with establishing assessment districts for undergrounding overhead utility lines and removing utility poles. Mayor Hill introduced the item and noted that the member of the Rolling Hills Community Association Board of Directors are also present at the dais. City Manager Cruz stated that the purpose of this study session is to provide information on the process associated with establishing assessment districts for undergrounding overhead utility lines. He reviewed the objectives of the meeting which include providing a brief history of the work done by the City and the RHCA; providing a step-by-step overview of the process; identifying the necessary consultants; outlining the financing options associated with the California Public Utilities Commission (PUC) Rule 20 A, B and C; providing an update on the status of the Eastfield Drive Assessment District; and finally a question and answer session. He stated that included in the staff report are three take home documents for future reference — the Underground Utilities Assessment District Guide; FAQ's About Underground Utilities Assessment Districts; and Myths and Facts About Underground Utilities Assessment Districts. City Manager Cruz then provided a brief history of the City and Association's previous collaboration with regard to undergrounding overhead utility lines. He sated that the City and Association's collaboration on undergrounding overhead utility lines and poles goes back 14 years when a joint feasibility study was initiated in 2000. The objective of the study was to identify where all the poles and lines were located in the city, determine the benefits of undergrounding, investigate the cost of undergrounding all the poles in the City, and determine what would it cost per parcel if a citywide assessment district was established. Mr. Cruz reviewed the maps that were created as a result of the study and the finding. He stated that at the time of the study, 665 parcels were receiving utilities from 563 power poles and the cost to establish a citywide Underground Utility Assessment District would be $34 million with an average assessment per parcel of $51,579 plus the on-site underground costs to connect each property which varied between $4,250 and $11,000 per parcel. He stated that although the feasibility study was completed, no citywide assessment district moved forward. Mr. Cruz reviewed the history of the City's usage of its allocation of California Public Utilities Commission (CPUC) Rule 20A funding. He stated that balance of $300,000 in the fund is typically necessary for SCE to move forward with a new project and City's current balance is $32,627. He also reviewed the history and allocations made to the City's Utility fund that was created during the fiscal year 2004-2005 budget planning process. He stated that Utility Fund balance is presently $1,022,175. Mr. Cruz then reviewed Southern California Edison's Infrastructure Replacement Plan and reviewed the type of work that will be done which includes replacing utility poles and lines. He showed photos of new poles that are part of the Eastfield Drive cutover project and their impact on resident's views. City Attorney Jenkins then provide an overview of the assessment district formation process. He stated that an assessment is a charge placed against a property for the purpose of paying, over time, the cost of an improvement that benefits the property by increasing the property's value. He further stated that an assessment district is a defined geographic area in which all of the property owners must pay the assessment. Assessment districts can be an entire city or specific neighborhoods. He stated that the assessment district formation process is governed by State law and begins with property owners in the proposed assessment district submitting a petition containing signatures of 60% of the properties in the geographic area of the proposed district. After the petition is submitted, the City Council typically adopts a Resolution of Intention stating that the City intends to start the process of creating an assessment district in the defined area. The resolution will contain a description of the project, a description of the boundaries, a provision for the issuance of bonds, and the intent of the City to levy assessments. He stated that the next phase in the process is preparation of an engineer's report which is a study to determine that the proposed improvement will benefit the properties within the district; how to Minutes City Council Meeting 02/24/14 -2- compute the assessments and determine a per parcel assessment amount. The assessment engineer also determines the amount of special benefit and general benefit that the project will achieve. Next, City Attorney Jenkins reviewed the process for financing the project. The City borrows the funds necessary to complete the project by issuing municipal-,bords'and.then the property owners within the district pay the City back through an assessment on their property taxes including principal and interest. To issue the municipal bonds, the City would hire an underwriter and a bond lawyer to assist in the process. City Attorney Jenkins further explained the process as follows: the assessment engineer prepares report for the assessment district and presents to the City Council; City Council then orders public hearing on whether or not to form the district during which time property owners within the district have an opportunity to vote on the matter by written ballot on a weighted basis based on the assessment methodology determined in the engineers report. If 50% plus one of those voting based on the weighted vote, vote yes, the assessment district is formed and the project proceeds to the financing stage which includes property owners either paying up front or the City selling bonds to raise the capital to fund the assessment district including the cost of the improvements, the cost of issuance of the bonds including the underwriter and bond counsel fees, the cost of the engineer's report and a reserve fund. Once the funding is complete, the project is put out to bid and ultimately constructed. Once construction is complete, it is the property owner's responsibility to connect from their property to the underground. utility and each property owner pays their costs individually and those costs are not a part of the assessment district. In response to comments from the public, City Attorney Jenkins stated that the statute governing assessment districts allows a neighborhood to impose the assessment on every property within the boundaries if it passes and that the initiation petition requires affirmation from 60% of the land area and that percentage is not weighted. Jeff Shellabarger, Project Manager Large Undergrounding Projects, Southern California Edison then explained the California Public Utilities Commission (PUC) Rule 20 tariff which outlines how electric companies within the State can underground their facilities. Rule 20A governs funds that are accumulated by Cities and allow cities to underground electric utilities in heavily traveled areas that are of benefit to the overall community and are paid for entirely by the utilities. Rule 20B governs projects a minimum of 600 ft. in length that are predominately paid for by an applicant and where the utility company pays for a portion of the project which includes the cost to remove the overhead facilities and the cost for installation of the equipment is paid for by the applicant. With Rule 20B projects, the utility company also applies a credit to the project based on the equivalent cost to build a brand new overhead system in that area. Rule 20C projects have no restrictions but the applicant bears the full cost. He stated that tonight's discussion will primarily focus on Rule 20B. Mr. Shellabarger then reviewed the status of the proposed Eastfield Drive assessment district stating that Edison has been provided a copy of the proposed boundary map which includes 34 properties and Edison is in the process of providing an order of magnitude estimate. Councilmember Pieper suggested that since interest rates are low, now might be a good time to consider a Citywide undergrounding effort like the one that was discussed in 2000. Helen Frykman, RHCA Boardmember asked for clarification on which poles are being increased in height and suggested that Edison flag the poles that are being increased in height so that the community can see the consequences. David McKinnie, RHCA Board President stated that he specifically requested this information from Edison and it has not yet been provided. He also asked for clarification regarding the deeding requirements, the requirement of individual properties to connect to the newly constructed underground utility; and once the project is installed and completed, who is responsible for repairs and future maintenance. In response, Mr. Shellagarger stated that easements are required on as needed basis only — not every property is required to grant an easement. He commented that Edison would contact those property owners where an easement is required before the final vote. He further commented that after installation, maintenance of the facilities will be Edison's responsibility except where they are on a homeowner's private property outside an easement. Regarding the requirement to connect, he stated the Edison relies on assistance from the City and other property owners to encourage participation. Minutes City Council Meeting 02/24/14 -3- In response to Councilmember Dieringer regarding other utilities being located on poles, Mr. Shellabarger stated that Edison shares the poles with the other utilities and Edison does not get money from those utilities. In response to a commented from the public, Mr. Shellabarger stated that Edison will not start construction until all of the easements have been secured, but they will begin the design process and engineering. Tom Brodie, 1 Hummingbird Lane asked if it has been statistically proven that underground utilities are more reliable than overhead — to which Mr. Shellabarger responded no. Mr. Brodie also asked if the project is awarded to the low bidder will Edison accept the work done - to which Mr. Shellabarger responded that the work should be done to Edison's specifications and Edison will take over the maintenance. Also in response to Mr. Brodie, Mr. Shellabarger stated that Edison will intercept existing undergrounding. Donovan Black, 39 Chuckwagon Road stated that in his previous experience it has been difficult to obtain firm costs and information on what will be done. In response, Mr. Shellabarger stated that Edison will provide a fixed price for its portion of the project. Mr. Black also asked if the Rolling Hills Community Association would be willing to use its reserve funds to assist with undergrounding costs. In response, President McKinnie stated that there is no reserve fund for undergrounding utilities at this time and the Board has not discussed the matter. Bill Corette, 35 Eastfield Drive questioned how undergrounding would increase the value of his property and stated that he does not feel undergrounding is necessary. Brief discussion ensued concerning the impact of undergrounding on property values and the current Edison upgrade project on Eastfield Drive where taller poles are being installed. In response to comments from the public regarding the communication pertaining to the upgrade project on Eastfield Drive, Mr. Shellabarger commented that he does not have the information to address those questions. Marcia Schoettle, 24 Eastfield Drive asked if there is an allowance for residents who are in favor of the project but cannot afford it. Mr. Shellabarger responded that he is not aware of such an allowance. Lynn Gill, 31 Chuckwagon asked what the typical time for maturity for the bonds to which City Attorney Jenkins responded the bonds are not less that 20 years or more than 30 years. Bern Galvin, 2 Chuckwagon Road asked if Eastfield Drive would quality for Rule 20A funds to which Mr. Shellabarger responded yes. Mayor Pro Tem Lay provided a brief history on the projects where Rule 20A funds were used to underground lines that crossed Portuguese Bend Road and Crest Road and to remove isolated utility poles. In response to the inquiries concerning property owners voting against the formation of an assessment district and ultimately refusing to connect to the new underground utility, City Attorney Jenkins stated that there are legal mechanisms available to compel that property owner to participate. Sean Bennett, 2 Williamsburg Lane commented that he has heard the process takes seven years from start to finish and asked if there is a way to speed that up. Mr. Shellabarger replied that the time estimate maybe a little long and they have had projects completed in as little as four years but he process depends on many factors. Alex Shipman, 15 Caballeros Road asked if eminent domain could be used to obtain easements to which Mr. Shellabarger responded that he is not aware of eminent domain being used in these types of projects. Mr. Shipman also asked why the poles have to be taller. In response, Marvin Jackmon, Region Manager, Southern California Edison stated that one reason is to accommodate the higher wattage line and in addition, there are new wind load requirements as well as the need to accommodate other additional utilities. Mr. Shipman suggested that the loads are only going to get greater and now is the time to consider undergrounding. Mr. Shipman also asked if the rate base is affected by whether or not the poles are underground. Mr. Shellabarger responded that rates are based on usage. Spencer Karpf, 14 Caballeros Road asked for an explanation of the $1 million in funds that Mr. Cruz mentioned. Mayor Pro Tem Lay explained that the money was set aside by the City for use he assist Minutes City Council Meeting 02/24/14 -4- residents interested by paying for feasibility studies to enable homeowners to pursue undergrounding opportunities. Leah Mirsch, 4 Cinchring Road asked if the residents interested in pursing assessment districts are asked to put any money into the project to show good faith and if they aren't, who pays for the work and what happens if the project doesn't move forward. City Attorney Jenkins responded that if the City put the money in, the money is gone but noted that there have been some instances where residents were asked to participate in funding the studies. Planning Director Schwartz provided an explanation of a project for a sewer mainline extension on Johns Canyon Road where interested property owners were asked to participate financially towards the feasibility study. Julia Bode, 21 Portuguese Bend Road expressed concern regarding cyber attacks and asked if undergrounding will protect against cyber attacks. In response, Mr. Jackmon stated that whether or not the facilities are underground or overhead does not change the susceptibility to cyber attacks. John Resich, 8 Outrider Road expressed concern that residents were not informed about the Edison upgrade project on Eastfield Drive. Mayor Hill and President McKinnie both responded to the issue. Mr. Resich suggested that the City and Association should keep residents informed. President McKinnie asked if as districts move forward in various areas of the City it is possible to combine those efforts to help lower costs. In response, City Attorney Jenkins stated that it would depend on the timing and if multiple district are approved at the same time, there may be some economies of scale in construction and hiring of the consultants. Diana Nuccion, 18 Portuguese Bend Road asked if a property is already underground, would that property owner be entitled to vote and would that property be exempt from the assessment. City Attorney Jenkins responded that he would need more information to be able to answer the question. Mr. Brodie asked if there is a mode of coordination with other utilities to coordinate construction efforts. President McKinnie responded that an attempt would be made to coordinate but there are requirements with regard to distance between the trenches that also need to be considered. Councilmember Pieper explained that there is very little that the City or Association can do with regard to what the utility companies do, but the objective of both the City and the Association is to help residents where there is an opportunity to do so. Mike Schoettle, 24 Eastfield Drive asked what criteria Edison uses when applying the credit allowed in Rule 20 B for overhead structures. Mr. Shellabarger responded that Edison uses the cost based on what exists currently. John Resich suggested that there should be surcharge on the cost of new construction to help offset the cost for the upgrades when new construction increases the load. He also suggested that Edison consider requiring an increase in the diameter of the pipes to accommodate future load requirements. Kak McKinnie, 3 El Concho Lane expressed concern regarding the unsightliness and overloading of the poles and utility lines on Georgeff Road. She stated that it is a safety issue and something should be done. Bill Corette expressed concern that the City doesn't have enough money set aside to help all residents with undergrounding. Mayor Pro Tem Lay explained that the City is very limited and the process for forming an assessment district is where residents have an opportunity to fund the project. Alex Shipman suggested that appraisals be prepare to help residents make a decision related to the increase in value that may be achieved by undergrounding. City Attorney Jenkins responded that appraisals are not required. Donovan Black commented that he feels it is the responsibility of those in charge to inform residents of the process and the challenges. He expressed concern regarding existing lines that are dangerously low. Spencer Karpf asked what the time frame is for Rule 20C projects. Mr. Shellabarger expressed his opinion that the time frame should be shorter but because he is not involved he doesn't now exactly how much shorter. Minutes City Council Meeting 02/24/14 -5- In response to Boardmember Frykman, Mr. Jackmon sated that Edison is preparing a communication plan to inform the City and Association of all projects for 2014. Councilmember Pieper suggested that Edison provide the plan for 10 to 15 years. Also in response to Boardmember Frykman, Mr. Jackmon stated that all poles that have not already been replaced will be replace in the coming years. Joe Heitzler, RHCA Boardmember asked what Edison plans to do to make the relationship between the City/RHCA and Edison less adversarial and make the relationship better. Mr. Jackmon stated they try to inform and communicate as much as they can. Mayor Hill commented that Edison, by its own admission, is not an underground company and undergrounding is not a panacea — it is more expensive to put in and maintain and when there are problems they are difficult to maintain. John Resich asked Mr. Jackmon to be more upfront with residents with regard to Edison's plans for improvements and provide earlier notification. Mayor Pro Tem Lay commented that the City and Association have asked for that information and it will be shared when it is received. He suggested that future comments be related to formation of underground utility assessment districts. Sean Bennett suggested that Edison provide the information with regard to the condition of every pole since that is information that they have already collected. Tom Brodie asked for the current and future City Council's commitment that if an assessment district is formed, the requirements for payment will be enforced. In response, City Attorney Jenkins stated that the City Council cannot commit future City Councils but the City will do what is necessary. Councilmember Dieringer echoed Boardmember Heitzler's comments. She asked Mr. Jackmon if the Edison rates in cites where a franchise agreement exists are higher than rates in cities where there is no franchise agreement — to which he responded that the rates are the same whether or not there is a franchise agreement. Councilmember Dieringer also asked Mr. Jackmon to provide a map of every piece of equipment that Edison has in the City and that the map provide information as to whether the equipment is on private property, in an Association easement or a recorded Edison easement. In response Mr. Jackmon stated that Edison does not have that information. Kristen Raig, Association Manager asked Edison if there are certain conditions or' terrain where an undergrounding assessment district can not be formed or lines couldn't be undergrounded for example, when a wire spans a canyon. Mr. Shellabarger responded that it is conceivable that such a condition could exist and that information will be determined in the analysis phase of the project. He also noted that in a situation where the utilities are already undergrounded, there can be an issue where there isn't room to put in the additional underground system. Director Frykman suggested to Mr. Jackmon that when Edison is installing new poles, they get input from the affected residents. Mr. Jackmon responded that those individual situations can be addressed by the local planner, Brian Small. President McKinnie reiterated that it is critical for Edison to provide information to the City and Association regarding their future plans and asked Mr. Jackmon to provide the information that was promised in November but has yet to be received. President McKinnie further commented that it is the Mayor and City Council's responsibility to support what the citizens in the community want to do with regard to undergrounding. Hearing no further comments related to this item, Mayor Hill adjourned the meeting to a brief recess at 10:00 p.m. The meeting was called back to order with all Councilmembers present at 10:06 p.m. OPEN AGENDA - APPROXIMATELY 8:00 P.M. - PUBLIC COMMENT WELCOME None. MATTERS FROM THE CITY COUNCIL AND MEETING ATTENDANCE REPORTS None. Minutes City Council Meeting 02/24/14 am 1 MATTERS FROM STAFF None. PUBLIC COMMENT ON CLOSED SESSION AGENDA Q.[ M CLOSED SESSION None. RETURN TO OPEN SESSION None. W11Z1Ti.TUN UM=OW" Hearing no further business before the City Council, Mayor Hill adjourned the meeting at 10:08 p.m. The next regular meeting of the City Council. is scheduled to be held on Monday, March 10, 2014 beginning at 7:30 p.m. in the City Council Chamber at City Hall, 2 Portuguese Bend Road, Rolling Hills, California. Approved, t FrankE. Hill Mayor Minutes City Council Meeting 02/24/14 Respectfully submitted, Heidi Luce City Clerk -7-