COUNCIL AGENDA REPORT
City of Anaheim
DEPARTMENT OF PUBLIC UTILITIES
DATE: SEPTEMBER 16, 2008
FROM: PUBLIC UTILITIES GENERAL MANAGER
SUBJECT: PROPOSED FIVE-YEAR UNDERGROUND CONVERSION PLAN FOR FISCAL YEARS 2008/09 TO 2012/13
ATTACHMENT (Y/N): NO ITEM #31
201 S. Anaheim Blvd.
Suite #1101
Anaheim, CA 92805
Tel: (714) 765-5137
www.anaheim.net
PROPOSED FIVE-YEAR UNDERGROUND CONVERSION PLAN
SEPTEMBER 16, 2008
Page 4 of 4
RECOMMENDATION:
That the City Council, by Motion, approve the proposed Five-Year Underground Conversion Plan for Fiscal Years 2008/09 to 2012/13 (Proposed Plan).
DISCUSSION:
On March 6, 2008, the Public Utilities Department (Department) presented the Proposed Plan to the Underground Conversion Subcommittee for its review and comments. The Proposed Plan was recommended by the Subcommittee to be considered by the Public Utilities Board (PUB). The Public Utilities Board recommended, at its meeting of May 8, 2008, that the City Council approve the Proposed Plan.
Background
On June 5, 1990, the Anaheim City Council (Council) approved a Citywide Underground Conversion Program (Program). The objective of the Program is to convert electrical, communication, and cable TV facilities located along Anaheim’s major thoroughfares from overhead to underground. Through the creation of underground districts, Council directs each utility with overhead systems to underground its facilities at its own expense.
For City-owned systems, the cost for converting overhead to underground electrical facilities is funded from a four-percent surcharge included in customer electric utility bills. The surcharge is dedicated specifically for undergrounding City facilities, which includes transmission (69 kV), distribution (12 kV) and City communication lines.
Underground districts are selected on the basis of the following criteria: coordination with other City projects, electrical reliability and engineering considerations, geographical diversity, improving City image, and available resources. Approved districts require coordination with other Departments and agencies that may have impacted facilities.
Progress Update
On July 31, 2007, City Council approved the current Five Year Plan that included seventeen underground districts. The Department completed four (4) circuit miles that includes Katella Avenue and Lewis Street within the Platinum Triangle, the intersection of La Palma Avenue and Imperial Highway, the intersection of Katella Avenue and Euclid Street, and Lincoln Avenue from Rio Vista to the Santa Ana River.
Portions of other projects along Sunkist Street, Brookhurst Street, and Euclid Street are being constructed with conduits and related substructures only, in coordination with the Department of Public Works’ street paving projects. Once the easement acquisitions and designs are finalized, the Department will complete these undergrounding projects. Work has been designed and planned in conjunction with telecommunication companies who share utility pole lines; however, these companies generally take about six to nine months to remove their facilities from the time the Department completes its work.
Proposed Plan
The Proposed Plan includes 15 projects in varying stages of planning, design and construction. These projects require significant coordination with other agencies, other City departments, and customers – all of whom have different stakeholder needs that have to be considered in order to implement a project. Depending on the complexity of the scope, projects may take two years to work out design parameters, accommodate customer property concerns, and secure necessary utility easements. As a result, the Department has evaluated methods of optimizing work processes and doing more in parallel to streamline schedules. A proposed solution for meeting this challenge to compress project schedules is utilizing the design-build methodology. The basis for this conclusion is described as follows.
Design-Build
In an effort to expedite each project, the Department is pursuing the utilization of design-build methodology to perform larger undergrounding projects. Design-build refers to a process by which one single entity provides project engineering, procurement of equipment and materials, and construction services for a project. Design-build contracting was approved by Council on July 23, 2002 for utility projects involving significant electric or water facilities in excess of $5 million. Ordinance 5815 added Chapter 10.06 to Title 10 of the Anaheim Municipal Code authorizing design-build contracting.
The first undergrounding project proposed for design-build is the combination of two existing projects in the 5-Year Plan, including Magnolia, which extends on Magnolia Avenue from Crescent Avenue to Ball Road, and Lincoln/Magnolia, which extends on Lincoln Avenue from Magnolia Avenue to Brookhurst Street. The projects include distribution and transmission facilities, as well as a flood control channel crossing. This project is in the west part of the City, and helps to balance the underground portfolio in terms of geographic diversity of projects. The Department will evaluate the results of this project to determine whether future underground projects should be constructed using the design-build methodology.
Independently, the two projects Magnolia and Lincoln/Magnolia are estimated at $12.3 and $5.2 million, respectively, for a total of $17.5 million. The Department anticipates the utilization of design-build will save between 10 to 15 percent with an anticipated cost savings of $1.7 to $2.6 million due to economies of scale and other efficiencies gained by having one entity responsible for the project. As stated, a typical project may take about two years to design, and over a year to construct. The design-build method is expected to compress the schedule from a three-year project to a two-year project.
Included in the Proposed 5-Year Plan is the acceleration of the Magnolia project in order to create a single district and provide for the expediting of both the Magnolia and Lincoln/Magnolia projects. The combined schedule for Lincoln/Magnolia and other projects in the Proposed Plan are shown in Exhibit A.
SCE Franchise
The Department is continuing its coordination efforts with the Southern California Edison (SCE) Company, to identify areas for joint undergrounding as part of the SCE Franchise Agreement. The current Franchise Agreement requires SCE to remove 7.2 circuit miles of overhead facilities. Of that amount, 4.55 circuit miles referred to as the “O” Line has been identified to be removed, which is located from Euclid Street to the Angel Stadium parking lot, between Katella Avenue and Orangewood Avenue. Through a series of coordination meetings with the Department, SCE has agreed to accelerate its schedule from the original completion due date of June 2010 to October 2008. SCE has begun its construction activities, which includes removal of the lattice towers and associated wires.
The remaining 2.65 circuit miles has been discussed with SCE, and coordination meetings have been held to identify thoroughfares in which the Department would underground its facilities at the same time. SCE is still reviewing circuits and streets, and as such, the Department recommends not including another project to the Proposed Plan until a joint project scope with SCE is identified.
IMPACT ON BUDGET:
The budget for the proposed Five Year Plan is $74 million, which continues to be funded by a four percent surcharge on electric utility bills. The surcharge collects approximately $10 million per year, which is enough for one large or two medium-sized projects.
There is no impact on the General Fund. Sufficient funds are budgeted in program 525-521-6771 in the proposed FY 2008-09 budget, and approval from City Council will be pursued to allocate additional funds in subsequent fiscal years.
Respectfully submitted,
Marcie L. Edwards
Public Utilities General Manager
Attachment:
1. Exhibit A: Underground Conversion Program 5-Year Plan Projects List