Centennial council ratifies new 1% utility undergrounding policy, gives city manager approval authority

The City Council of Centennial on Oct. 7 approved Resolution 2025-R-47, repealing Council Policy 2008-CCP-01 and ratifying Administrative Policy 2025-AP-01 to govern the use of the city's "1%" utility undergrounding funds held by Xcel Energy and CORE Electric Cooperative.

The new administrative policy consolidates direction for both franchise-held funds, gives the city manager authority to approve use of the funds for eligible undergrounding and related public improvements, and requires staff to present an annual undergrounding project priority list to council. The vote carried with eight ayes.

Why it matters: the 1% funds are created in franchise agreements with the city's electric utilities and are intended specifically for undergrounding overhead electric distribution facilities in the public right-of-way; CORE's fund also permits certain public and sustainability improvements. The policy change updates a 2008 policy that applied only to Xcel's fund and clarifies procedures for the newer CORE fund established in 2022.

City staff said the funds are held and spent by the utilities at the city's direction and are not part of the city's general fund. Staff told council the funds carry forward from year to year and that the city may advance or credit against future fund receipts. Staff also described project costs and current and proposed project locations.

"The current approval process in the 2008 policy is outdated and could be more efficient," said Wyatt Peterson, senior strategic advisor, who presented the proposed administrative policy. Anthony DeVita, the city's public works program manager, summarized the project consideration criteria and the list of current project locations.

Peterson and DeVita told council staff estimated undergrounding at roughly $1,000,000 per mile, with project-level variation based on existing infrastructure. DeVita said the Holly Street project in the Arapahoe area was approximately $2,000,000; the intersections noted on the west side of the city included a roughly $180,000 Xcel work component at Arapahoe and Clarkson, Dry Creek and Clarkson at about $350,000, and Dry Creek and Franklin at about $300,000. Staff identified the larger Holly Street area and three intersections as the projects currently under consideration.

Council members asked several clarifying questions about fund balances, how long fund balances persist, which franchise holds which territory, and how project costs are estimated. Staff confirmed the Xcel 1% fund balance reflected a longer history and thus a higher aggregate balance (staff referenced approximately $12.4 million in aggregate Xcel 1% availability, including projected future receipts) and reiterated that unused annual allocations carry forward.

Mayor Pro Tem Sutherland moved to approve Resolution 2025-R-47 to repeal Council Policy 2008-CCP-01 and ratify Administrative Policy 2025-AP-01; the motion was seconded and carried with eight ayes. Staff will provide the annual undergrounding project priority list to council as required by the new administrative policy.

Notes: the funds remain administered by the utilities (Xcel Energy and CORE Electric Cooperative) at the city's direction and are not recorded as city budgeted revenue. The new administrative policy centralizes approval authority with the city manager and formalizes the criteria staff will use when asking the city to direct utilities to expend 1% funds for undergrounding projects.

The presentation and council discussion occurred during the regular meeting; this item was not a public hearing.