HomeMy WebLinkAbout10/22/1996, C-6 - AUTHORIZATION FOR ACQUISITION OF STREETLIGHTS CITY PLAN NO. 95-35 counal "t7la
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C I T Y O F SAN LU I S O B I S P 0
FROM: Michael D. McCluskey, Public Worts Direc
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Prepared By: David Elliott, Administrative Analyst I
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SUB.IECT: Authorization for Acquisition of Stmedighis
City Plan No. 95-35
CAO RECOMMENDATION
Adopt a resolution which 1) approves the appraisal report on streetlights owned by PG&E
2) establishes $157,165 as just compensation for acquiring streetlights and 3) authorizes the
City Administrative Officer to offer PG&E $157,165 for acquisition and transfer of
streetlights to the City
DISCUSSION
Background
According to the most recently compiled inventory (submitted by PG&E within the last three
weeks), there are 1,900 streetlights within the City. PG&E owns 1,849 of these lights, and
the City pays PG&E for rent plus electricity and maintenance on them. In 1994 Public
Works began investigating the feasibility of acquiring these streetlights from PG&E in order
to reduce operating costs. With appraisals and feasibility studies completed, the City is ready
to proceed with acquisition.
Using the detailed inventory famished by PG&E, R.W. Beck, Inc. prepared a revised
appraisal report on the streetlights owned by PG&E. This report used three approaches to
estimate fair market value:
1) calculating reproduction cost new less depreciation at $297,196
2) calculating original cost less depreciation at $155,992
3) calculating capitalized income at $158,138
From these calculations 1LW. Beck concluded that the estimated fair market value should be
$157,165.
Next Stens
If the Council adopts the proposed resolution, the City Administrative Officer will tender an
offer of $157,165 to PG&E for acquisition of the streetlights. This step is necessary in case
PG&E rejects this offer and the City must begin condemnation proceedings. Assuming that
PG&E may reject the offer, Public Works will schedule a public hearing in November for the
Council to adopt a resolution of necessity authorizing the city attorney to start eminent
domain proceedings.
Council Agenda Report - Resolution Authorizing Acquisition of Streetlights
Page 2
FISCAL EMPACT
Feasibility calculations show that the City can save about $75,000 each year in operating
costs by acquiring the streetlights and taking over maintenance. This amount will be reduced
by annual debt service on the bond proceeds needed for acquisition. Depending on final
acquisition cost, net annual savings after deducting debt service could range from $36,000 to
$62,000. The acquisition is funded in the approved 1996/97 budget, page E-4, with sufficient
funds to cover $157,165.
Attachment
Resolution
(A copy of the appraisal report is available in the City Clerk's office.)
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RESOLUTION NO. (1996 Series)
A RESOLUTION OF TSE COUNCIL OF THE CITY OF SAN LUIS OBISPO
AUTHORIZ NG ACQUISITION OF STREET LIGHTING FACILITIES
BE IT RESOLVED by the Council of the City of San Luis Obispo as follows:
SECTION 1. The appraisal report of RW. Beck, Inc. dated September 1996, concerning the
value of the street lighting facilities of the Pacific Gas & Electric Company located within the
territorial boundaries of the City of San Luis Obispo is approved, a true copy of that report being
attached as Exhibit 'A' and incorporated and made a part of this resolution.
SECTION 2. The sum of$157,165 is established by the City of San Luis Obispo as the
amount which it believes to be just compensation for acquisition of the street lighting facilities
of the Pacific Gas & Electric Company as described and so valued in the appraisal report.
SECTION 3. The City Administrative Officer is authorized and directed to offer to the
Pacific Gas & Electric Company the sum of$157,165 for acquisition and transfer of ownership
of the street lighting facilities to the City of San Luis Obispo.
Upon motion of second by
and on the following roll call vote:
AYES:
NOES:
ABSENT:
the foregoing resolution was adopted this day of 1996.
Mayor Allen K. Settle
ATTESTED:
City Clerk
APPROVED:
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