Committee Responds to Criticism Of Utility Undergrounding Project

Tuesday July 13, 2004

Erna Smith’s commentary (“District Would Raise Neighbors’ Property Taxes,” Daily Planet, July 9-12) makes accusations and assertions that simply are not true. This response will try to correct the most important issues. Above all we would like to emphasize the considerable amount of support this project has. 

First of all, the process of utility undergrounding is neither the “brainchild of a handful of neighbors” nor something arbitrarily created by the city. Rather it is established by state law and is regulated in Rule 20B as set forth by PG&E. This rule establishes a process whereby property owners who are not covered by Rule 20A (in which the cost of undergrounding is mostly funded by the utility companies as is required by law) are offered the possibility of funding their own district. This rule applies to all PG&E customers—not just Berkeley residents. And, as Ms. Smith points out, this rule only requires a simple majority to create a district, in accordance with Proposition 218. 

Beyond these state level regulations the city has the right to set its own guidelines for establishing a district. Berkeley’s guidelines impose a much stricter framework for districts. The process involves three steps.  

1) Seventy percent of the property owners in a proposed district must express interest in receiving formal information from the city regarding how to establish the district.  

2) Seventy percent must sign a formal petition and fully fund the design costs of the project.  

3) A final mail balloting is conducted by the city during a 45-day period, which ends with a public hearing. Then the ballots are tallied and the City Council decides whether or not to form the district. The city guidelines required a 70 percent majority for this final ballot at the time we began the project. However, on June 1, prior to mailing out the district ballots, the City Council voted unanimously to change the requirement to 60 percent. On June 2, the district committee circulated an update to the district property owners informing them of this rule change. On June 4, the ballots were mailed. 

Here is the history of the undergrounding initiative. Several years ago, a large number of neighbors on our two block street of Kentucky Avenue expressed keen interest in forming a disaster plan for our neighborhood. City officials held two meetings with us that were attended by approximately 50 people. We then formed three committees for light search and rescue, first aid and fire suppression. A few of us even attended classes offered by the fire department. Out of this disaster planning grew an interest in utility undergrounding. A committee of about 30 people was formed in an area that originally included 283 houses. Seventy percent of the property owners in the area signed a petition expressing interest in undergrounding. Thus we achieved step one of the process. 

Step two represented a more formidable hurdle. Many people shied away from supplying the $2,519 per owner that was required for the design costs. Nonetheless, there was still a contiguous group of 104 houses at the core of the area whose owners felt strongly enough to take this next step. Of those 104 property owners, 79 contributed to the design costs. We delivered a total of $186,000 to the city in August of 2002. In addition, there were four more owners who stated to us that they supported the forming of a district and would most likely vote in its favor, although they did not have the cash to contribute at that time. This means that we had 83 out of 104 owners who supported undergrounding. This is more than 80 percent and thus beyond what the city required, not to mention the simple majority required by Proposition 218. No matter how you view the issue, this was an amazing accomplishment. 

Of the remaining owners, five were absentee landlords, two were on the fence, four were neutral, two gave no feedback, three have sold their houses in the meantime, and two were definitely opposed but indicated they would respect the majority vote. This leaves only three owners out of 104 who told us they were adamantly opposed to forming a district. Not surprisingly, Erna Smith is the partner of one of these owners. Interestingly, two out of three of these opponents live on the “view” side of the street and would enjoy all the anticipated benefits of this project in full.  

These statistics should make it clear that the district has had overwhelming neighborhood support. Now we are nearing the completion of step three (the balloting). Unfortunately, there were significant delays in the design process and estimated costs escalated. This led to some erosion of support. The good news is that the final cost estimates, which will be available July 12 at our district wide meeting, will reflect substantial decreases in the cost from the figures shown on the mailed ballots. This should help property owners as they make their own decision on how to vote. 

Some additional issues as stated in Ms. Smith’s commentary need to be specifically addressed.  

It is not true that “everyone’s tax dollars” paid city staff time. The time that city staff has devoted to this project over the past three years is fully covered in the project budget as reflected by the upfront design costs already provided to the city. Should the district be established, the interest on the bonds will be paid to the investors who purchase the bonds. To our knowledge, the city has no intention of purchasing the bonds. Recognizing that this project will be of benefit to the city as well as property owners in the district, the city has supported our undergrounding initiative from the beginning. Mayor Bates has repeatedly expressed the hope that eventually the entire city’s utilities could be undergrounded. The organizing committee feels uncomfortable with Ms. Smith’s quoting of city officials and staff out of context.  

We welcome input from anyone in the city. However, we hope this clarification will counteract the misinformation and inflammatory language presented by Ms. Smith in her commentary. In light of all of the factors we have mentioned here, the organizing committee still feels strongly that this project is a valuable and wise investment in terms of safety, aesthetics and property values. 


The Organizing Committee :Everett and Cathy Moran, David and Ursula Partch, Carol Bledsoe, Marilyn Couch, Don and Gloria Price, Eileen McDavid, David and Debby Keefe, Richard Ruggieri, Edith Lavin, Andy and Cindy Neureuther, Anthony Eredia, Diana Bermudez.