LB Voters Likely to Decide City-Wide Undergrounding

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By Cassandra Reinhart, Special to the Independent

As soon as November of 2018, Laguna Beach voters may head to the polls to decide whether they will pay up to $200 million dollars to underground utilities city-wide.

Tuesday, the Laguna Beach City Council repealed its preliminary undergrounding ordinance, passed in March, to avoid litigation initiated by regional utilities over the ordinance’s mandates and anticipated costs to utility companies.

The city instead decided to pursue routes to pay for the undergrounding itself to move the project forward as soon as possible.

“The unwillingness of the utility companies to partner with us, and their aggressive opposition to the undergrounding ordinance, leave us with only one alternative,” said Councilmember Bob Whalen. “That is to shoulder the burden ourselves and develop a locally funded plan to underground the entire community.”

In April, both Southern California Edison and San Diego Gas and Electric filed separate lawsuits challenging the lawfulness of the city’s utility undergrounding ordinance.

The city’s settlement agreement with the utilities mandates the city repeal the initial ordinance and, in return, the utilities will advance up to five years of Rule 20A funding, the funding mechanism that converts overhead electric utilities underground, for utility projects. SCE will also do a 12-month fast track for the undergrounding design plan of Laguna Canyon Road, and SDGE will advance additional funding to the city for projects over the next five years.

But that will not even come close to funding the project city-wide, which planners estimate could cost up to $200 million dollars. The city has hired a consultant to do a preliminary study on forming a Community Facilities District, or CFD, to fund a city-wide undergrounding project.

CFDs are a tax measure that tax people who receive the benefit from that facility or installation. The city could also issue general obligation bonds, but they differ as they are used as a city-wide benefit function, and may be better suited to fund undergrounding of just the evacuation routes and Laguna Canyon Road.

Both options require voter approval and the city hopes to have a clear course of action by the spring of 2018. The measures could be placed on the ballot for voters as soon as November 2018.

“Yes, the plan will be expensive in terms of absolute dollars,” Whalen said. “The property values in our community are $13 billion dollars on the property tax rolls. Market value is in excess of $20 billion. When you have got $20 billion at risk, you’re investing $200 million, one-percent of the value of the property. I think that is an easy choice to make.”

In the meantime, the council voted to use $3 million in available funds and up to $4 million in Measure LL, street lighting and existing Rule 20A funds available during the next two fiscal years for undergrounding of utilities along highest priority evacuation routes.

Laguna Canyon Road, Monterey (from Hawthorne to Linden) and Thalia Street (from Temple Terrace to SW Glenneyre) are the city’s top three evacuation routes and top three priorities for undergrounding. The city also voted to approve and authorize the purchase of California Public Utilities Commission (CPUC) Rule 20A undergrounding credits from Rancho Santa Margarita and Indian Wells at $0.55 on the dollar.

“Every dollar of this we buy we are saving .45 on the dollar for the community,” Whalen said. “This is going to be an important tool for us.”

Through a slideshow comparing Laguna Canyon Road to recent photos from fire-ravaged Santa Rosa, city planners drew a comparison to conditions in which downed utility poles and lines fed fire conditions.

Since 2007, over 58 vehicle accidents have caused downed wires on Laguna Canyon Road, resulting in closures. As recently as October 15, a vehicle accident hitting a Frontier utility pole resulted in the closure of Laguna Canyon Road for 17 hours.

“As we learn more and more from the fires up north, one of the major issues they had was with the evacuation,” former Laguna Beach Fire Chief Jeff LaTendresse told the council. “As much as we want to get people out of harms way, the firefighters aren’t going to be able to get in and do their job unless we can drive up the streets.”

Residents addressed the council in support of the undergrounding initiative, and stressed urgency.

“If you are asking property owners to potentially asses themselves tens of thousands of dollars for the undergrounding, you really have to send the message and by your actions indicate we are going to focus all of our available monies first and foremost toward this effort,” said resident Michael Morris. “Otherwise you won’t get the votes from the citizens.”

Many council members, and community members, commented that the recent northern California fires have put a new perspective on the urgency of Laguna’s undergrounding project.

“It has really sunk in to me that this is probably going to be one of the most important things I work on in my life,” said Councilmember Rob Zur Schmiede. “The only way we are really going to move this ahead and accomplish anything in any kind of reasonable time frame is if we pull ourselves up by our bootstraps and do it ourselves.”

 

 

 

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