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The undergrounding of overhead utility wires and poles is considered desirable by the City of Sausalito. Undergrounding of these utilities improves public safety under fire, earthquake and high wind conditions; reduces PG&E maintenance costs for tree trimming to maintain overhead lines and equipment; and results in improved visual characteristics.

California State law provides a method to form districts to carry out such undergrounding. In essence, such districts must have the approval of a certain percentage of the property owners in the district, be approved by PG&E and other utilities affected and by the Sausalito City Council. When all of these requirements have been met, all property owners within the district will be required to participate.

The Public Utilities Commission provides for certain PG&E funds to be set aside for use by cities to defray the costs of undergrounding projects that have been approved by the cities and PG&E. A detailed definition of the availability of these funds are contained in PG&E Rule 20 - "Replacement of Overhead with Underground Electric Facilities" - and is available from the Underground Committee. Interpretation of this document, when used in a combination of Rule 20 funds and property owner funds, is further interpreted in PG&E letter of July 18, 1994. The following is a review of the procedures required to form undergrounding districts in Sausalito, the options available in their formation, and the procedure to be followed.


  1. Develop Cost Estimate
    In order to start the process of establishing an undergrounding project, a preliminary cost estimate (plus or minus 20%) must be established. This will normally be done by the utilities, and will require an advance deposit from the property owners to pay the utilities for design engineering time required to develop the preliminary cost estimate. A map must be developed outlining the project boundaries. Assessor parcel maps are available at the City Community Development Department for this purpose. Upon completion of this phase, the petitioners may decide to proceed, to change the boundaries, or suspend the procedure. Significant changes in design, such as the boundaries, may require additional deposit costs over those originally estimated by the utilities. If it is decided to proceed, Petition No. 1 must be prepared.

  2. Submit Petition No. 1
    A petition must be submitted for the proposed district. Property owners representing at least 60% of the land area (in square feet) in the proposed district must sign Petition No. 1. The petition accompanied by a map shall be submitted to the City of Sausalito Underground Committee, c/o Community Development Department, 420 Litho Street, Sausalito, Ca 94965. See sample of petition and map attached.

  3. Underground Committee Information Meeting
    Upon receipt of the petition, the Underground Committee will meet with the petitioners, PG&E, and any other affected utilities, to determine which P.U.C. Rule may be applicable in order to provide further information to the petitioners regarding district formation.

  4. Funding Options
    There are 4 basic funding options which may be available depending on the determination of the City and PG&E. These basic options are as follows:

    1. Rule 20A. This option is reserved for the City of Sausalito.

    2. Rule 20B/A. In this option, the project meets Rule 20A requirements. The majority of the funds will be provided by the district property owners but some party will be paid for from the use of available Rule 20A funds at the discretion of the City Council.

    3. Rule 20B. This option will be used for projects that do meet some of the Rule 20A requirements but not all; or when Rule 20A funds are not available. This approach still yields cost benefits to the property owners, resulting from credits for overhead materials and exclusion from CIAC (Contribution In Aid Of Construction) taxes. All costs will be paid by the property owners. Rule 20B projects need the formation of district and require City Council approval. If not, option Rule 20C can be used.

    4. Rule 20C. Under this option, the entire project is paid for by the property owners. However, the project does not require the petition process; but does require coordination with the City for issuance of the proper building permits. The property owners will work directly with the contractors and utilities in implementing the undergrounding.
      Property owners' funds must be deposited with the City prior to the start of any work on the project, or, in the case of Rule 20C, deposited with the utilities. In projects 20B/A, 20B, and 20C, trenching, backfilling, conduit and boxes located on the home owner's property will be contracted for and paid directly by the home owner. In the event of an overrun in costs, the property owners will provide additional funds to cover the overrun.
      Property owner funds may be derived by cash contributions from the owners or may be acquired through the establishment of a Municipal Bond. In the case of the Bond, repayment of the Bond is via property taxes collected annually by the City. When the property is sold, the indebtedness passes to the new owner.
      Where funding is derived from the issuance of a Municipal Bond, it may be required to hire an Engineer-of-Work organization and a Bond agent. The Engineer-of-Work organization is a professional engineering group which will provide a report defining the district geographical definition and attesting to the fairness of assessment criteria.

  5. Design Engineering
    In order to initiate the bidding process to establish final firm costs, a composite drawing must be created. This drawing contains the detail information on trench size and location and the location of equipment within the trenches. This drawing may be created by the utilities or an independent design agency. The utilities will provide a review and approval of these drawings.
    The cost for these services under Rule 20A will be paid from Rule 20A funds. Under Rule 20B/A and 20C, the cost will be paid by the property owners.

  6. Development of Firm Costs

    1. Rule 20B/A and Rule 20B Projects.
      Upon completion of an approved composite drawing for the project, the City will initiate a public bidding process. At that time, the utilities will submit a firm bid for their portion and independent contractors will be requested to bid also. In general, the utilities will supply the electrical equipment, cabling and final installation; and the contractors will supply trenching, conduit, substructure, and backfill to the property line. In some cases, the utilities may elect to bid on the entire project. The utilities will remove the overhead facilities upon completion.

    2. Rule 20C.
      The property owners may elect to contract with a private company to do the trenching, conduit substructure and backfill, or with the utilities. The utilities will do their part as in rule 20B/A and 20B projects. The costs for this work will be paid directly by the property owners.

  7. Submit Petition No.2
    Property owners representing at least 60% of the land area (in square feet) in the proposed district must sign Petition No. 2. This petition, accompanied by the map, shall be submitted to the Underground Committee in the same manner as Petition No. 1. At this point, the district participants will have additional information in that they will have a firm cost.

  8. City Council Public Hearing
    If the Underground Committee finds that Petition No. 2 contains the signatures of property owners representing 60% of the land area in the proposed district, it will recommend to the City Council that the district be formed. The City Council will then schedule a public hearing. All property owners in the proposed district and affected utilities will be invited to the public hearing where all interested persons will be given an opportunity to be heard. At the conclusion of the public hearing, the City Council will make a decision regarding formation of the district. The Council's decision will be final and conclusive. If the district is formed, property owners within the district and the affected utilities will be notified of their participation requirements.

  9. Additional Expenses
    Additional costs may be incurred to compensate the City for services in conjunction with the bidding process, inspection of the construction, and the purchase of replacement street lighting.

  10. City and District Approve Final Construction Contracts

Conclusion: Any surplus private funds remaining on deposit with the City may be returned to property owners in the proportion which each individual property owner's deposit bears to the total of all individual property owners' deposits.


  1. Develop Preliminary Cost Estimate
    Property owners raise funds for preliminary cost estimate.
  2. Petition #1
    Include signed petition and map.
  3. Information Meeting
    Includes petitioning group, Underground Committee and utilities.
  4. Funding Options
  5. Design Engineering

    • Home Owners raise funds for engineering
    • Contract for final composite drawing from utilities or independent contractors
    • Utilities provide final approval of engineering

  6. Development of Firm Costs
    City of Sausalito obtains firm bids from contractors
  7. Submit Petition #2
  8. City Council Hearing
  9. Additional Expenses
  10. City and District Approve Final Construction Contracts
Last updated: 1/31/2012 3:50:53 PM