Policy on Undergrounding Utility Wires in a Flash!

Board of Estimates today, Board of Public Works Wednesday and probably approved by council a week from tomorrow. So, if you’re interested in how much you pay and how and when and why, you might want to read this.

I haven’t seen this discussed anywhere, don’t know where the criteria came from about where they will do this, or who decided it would only be we an only afford it in TIF districts or who decided why we’re paying for the homeowners to upgrade their electrical in their homes. I know this has been an issue for years, but this is awful quick for a big issue and very little official public discussion.

Policy for funding the Undergrounding of Overhead Utility Lines

Background
There has been an increased interest in the undergrounding of overhead utility lines. Funding has come exclusively from Tax Incremental Financing in recent years. The cost of underground the utilities vary depending upon how many utilities are on the utility poles and the type of facility on the poles. Cost for distribution lines generally range from $30,000 to $100,000 per 100 feet. The cost to undergrounding a high voltage transmission line is considerably more expensive.

Design Considerations
The overhead lines are generally placed underground in utility conduits. Electric transformers, which are generally on the poles, must be replaced with pad mounted transformers. These pad mounted transformers occupy about a five foot by five foot space and are generally located on private property in easements. In addition, service pedestals are often required for each utility. The utilities must acquire the easements and there can be aesthetic concerns associated with the transformer boxes and pedestals. Services to homes and businesses, which were above ground, are routed below ground and the wiring may have to be modified in the home or business to accommodate the new underground service. When the home or business owner is required to modify the wiring in the building, typical costs are about $2000 however in some instances costs
can be far greater.

Funding Policy for Overhead Utility Lines
The City of Madison is not able to fund undergrounding of overhead utilities with general obligation borrowing on a large scale due to other priorities. The City will continue to use Tax Incremental Financing (TIF) funds when authorized in the relevant Tax Incremental District (TID) Project Plan approved by the TIF Joint Review Board for undergrounding of overhead lines.

Streets may qualify for the use of general obligation borrowing for the undergrounding of overhead utility lines in the following two ways:
1. Collector or arterial street with commercial development. All of the following must be
met.
1. Funding is available.
2. The project is part of a street reconstruction project or conduit has been installed as part of a previous project to facilitate the undergrounding of utilities.
3. The street is a collector street or an arterial street.
4. The properties abutting the street are commercial or the abutting properties consists of a mix of uses and has a substantial amount of commercial development.
5. One of the three following items must apply.
a. More than 50% of the cost is paid for by another source such as a private utility or another municipality, or
b. Greater than 50% of the properties abutting the project are ready to accept underground service , or
c. Utility poles have already been removed for the majority of the block such that less than 50% the properties remain served above ground.

2. Any Street, more than 50% contribution from another source. All of the following must
be met.
1. Funding is available.
2. The project is part of a street reconstruction project or conduit has been installed as part of a previous project to facilitate the undergrounding of utilities.
3. More than 50% of the cost is paid for by another source such as a private utility or another municipality or the majority of the poles are being relocated as part of the project and the utility(s) is/are contributing that amount to the cost of the undergrounding.

The City shall not contribute funds from general obligation borrowing where the undergrounding is intended to benefit a specific developer. In these instances, the cost shall be paid for by the developer or by tax incremental financing.

NOTE: In addition to funding limitations, there is a limit to the number of projects that can be undertaken by the Utilities in any given year due to the limited staff resources that they have available. Four or five blocks total City wide, depending on the complexity and the number of properties involved, is at the upper limit of the Utilities ability to accomplish the undergrounding projects.

Reimbursement Policy For Wiring of Buildings not Ready to Accept the Underground Wire
Buildings taking underground service today will generally have a 200 amp service with a meter on the outside of the building. Buildings within an undergrounding project will generally fall under one of these three categories:
1. The building is already served underground.
2. The building is served overhead but wiring within the building has previously taken place and the building is ready to accept underground service.
3. The building is served overhead and is not ready for underground service.

Buildings in categories one and two above require no modification inside the building and are easy to serve. Buildings in category 3 may require some modification to the wiring in the building and those costs average about $2,000. The City shall pay 50% of the cost to modify the wiring within the building to accept the service provided the costs do not exceed $1,000. This policy anticipates the passage of a City Undergrounding Ordinance and it is anticipated that the ordinance will require the following:
1. The City of Madison Common Council establishes an Underground Utility District when the City desires to place overhead services underground.
2. The City of Madison notices all property owners within the district who have overhead service of the establishment of the district and the requirements of the property owners within the district by class 1 notice.
3. All properties within the district have up to 24 months from the date the district was established by the Common Council to modify their service to accept the underground service.
4. The City shall reimburse the property owner for 50% of the property owners cost to rewire the building to accept the underground service. The reimbursement to the property owner shall not exceed $1,000. The maximum reimbursement amount shall be adjusted on January 1 of every year in accordance with the
Construction Cost Index as published by the Engineering News Record or a similar index if the Engineering News Record index does not exist.
5. Properties not rewired to accept underground service prior to the time specified in section 3 are subject to fines of up to $ 100 per day. In addition, if any property owner fails to meet the time frame specified in section 3, the property owner shall not be eligible for reimbursement by the City under section 4.
6. The City Engineer may grant an extension of the time frame for compliance specified in the ordinance where the Property Owner meets the Comptroller’s income requirements which would allow for the deferral of special assessments or the cost is greater than 3 times the maximum amount the City will reimburse
the property owner under the ordinance.
7. Only property owners within the Underground Utility District shall be reimbursed by the City for a portion of the cost to rewire their building to accept underground service

If you have opinions, speak in the next 8 days!!!!