Over $450,000 of City funds prioritized for undergrounding Moraga and Oakland Avenues have been loaned to, but not repaid by, private undergrounding district homeowners.  The history of how this occurred goes back many years.

The Public Utility Commission requires that PG&E set aside money it receives from utility users in a special 20A fund reserved for public undergrounding projects*.  This is in contrast to 20B and 20C districts which rely on private funding:

• 20A Projects use 20A funds to pay for public undergrounding projects. In Piedmont, Moraga, Oakland and Grand Avenues, major corridors, were prioritized for the City’s 20A funds after a comprehensive study conducted by staff. (See Resolution 85-85, p. 1, p. 2, p. 3.)  Grand Avenue undergrounding was completed using 20A funds.

• 20B Projects use money from property owners self-selecting themselves. City Council approval of the district allows a special assessment district to be formed and bonds issued; construction is performed under the management of the City.  Current 20B agreements between the City and homeowners open the City General Fund to invasion for costs not originally a part of the City’s agreements with property owners who desired the undergrounding project.  The City may bear the risk of cost overruns beyond contingency funds and Acts of God. (Chiang report, p. 6 and 13.)

• 20C Projects use money solely from property owners self-selecting themselves who work directly with PG&E to manage the undergrounding project.  The property owners pay all expenses incurred and the City plays no management role in these projects.  There is no risk to the City.

Using 20A public funds for the benefit of private districts

Undergrounding proponents have urged the City to make 20A public funding available to 20B private district as seed money since 2003.  (See p. 5-7 and Source Materials below).  At a 2-3-03 City Council meeting the City Administrator advised there were too few 20A monies to fund the undergrounding of any properties except those owned by the City and School District.  (p. 4)  However, the Council supported their use, “agreeing that the likelihood the City will ever use Rule 20A funds to finance utility undergrounding along Oakland Avenue is remote.”  (5-5-03, p. 7.)

In October, 2003 the Council considered and authorized $25,000 to Central Piedmont when proponents ran short of funds.  > Click to read more…

Piedmont Civic Association Commentary on Undergrounding Reports from the Audit Subcommittee and the League of Women Voters

To date, the efforts of the Audit SubCommittee and the League of Women Voters have emphasized contract administration analysis.  Information and analysis of undergrounding concerns provides a valuable shared knowledge base to the Council and residents in their upcoming efforts to undertake substantial revisions to City undergrounding policy.  It is hoped both the Audit Subcommittee and LWV will continue their much appreciated efforts, providing analysis and recommendations to the Council and the community on:

• The use of public funding to facilitate the creation of  private undergrounding districts
• The loss of 20A public funds
  
• The City’s financial stake in approving Districts
• The potential or perceived impact of a financial stake on the decision-making process
• The magnitude of 20B projects in comparison to City revenues and reserves
  
• Other  undergrounding options:  20C Districts and city-wide undergrounding
  
• Chiang analysis:  Does the City become the  “ultimate insurer” of every 20B undergrounding project?
• Will immediate knowledge and reporting of cost overruns improve the City’s options?
• Shifting cost risk from the City to private districts
• Preventing misunderstandings by Staff and/or Council of the nature of City contracts
  
• The extent and appropriate use of informal meetings, without formal public notice, between homeowners and city staff
• Review of additional aspects of past experience
• Optimum threshold level of support – review, comparison and a specific recommendation
• Grounding the report upon the Piedmont City Charter
  

The use of public funding to facilitate the creation of  private undergrounding districts

Current undergrounding policy prohibits the use of “general funds” for pre-formation expenses.  However, this policy has been interpreted to refer only to the City’s General Fund, and to allow the use of 20A public funds (a separate account containing monies received from PG&E for undergrounding major arterial streets) for the benefit private 20B districts.  Use of these public funds has been authorized as follows:

• $25,000 for Central Piedmont (due to seed money shortage – see p. 15)
• $128,000 for Central Piedmont (to satisfy remaining district debt when it failed to be approved)
• $150,000 for Piedmont Hills
• $150,000 for Hampton Sea-View (p. 5) > Click to read more…

A Letter from PCA to the Piedmont City Council Special Audit Subcommittee and City Council explaining the organization’s history

Piedmont Civic Association
20 Scenic Avenue
Piedmont, Ca 94611

Dear Mayor Barbieri, Vice Mayor Chiang and Judge Kawaichi,

At your March 15, 2011 Special Audit Subcommittee meeting, a question arose regarding the signature on the letter submitted by the Piedmont Civic Association (PCA).  To familiarize you with our association, PCA is a long standing volunteer organization in Piedmont originating in 1986. > Click to read more…

The Piedmont Hills Undergrounding Project has been controversial and several studies have been undertaken.   Join the Piedmont League of Women Voters for a presentation from the members of the League’s Undergrounding Task Force on Tuesday, April 26 at 7:30 in the City Council Chambers at 120 Vista Avenue. A panel will discuss lessons learned from this project and a question and answer period will follow.  > Click to read more…