Laguna to put up $600,000 to move Woods Cove utility lines underground

Laguna Beach City Council members voted unanimously Tuesday to place overhead utility lines underground in a 335-property assessment district, the largest considered by the city in 15 years.

The city will front about $600,000 from the street lighting fund to cover planning costs. The money would be repaid through assessments on a 15-year tax bond if the work proceeds.

The project in the Woods Cove neighborhood would extend east from Coast Highway to Summit Drive and span 67 acres.

City policy requires that at least 60% of property owners in such a proposed district sign a petition and pay $500 each as a show of commitment, with the expectation that all would pay the rest of the costs through the bond assessments.

Undergrounding the utilities could take as long as eight years, said Public Works Director Steve May, who helped residents draw the district boundaries.

In Woods Cove, 199 property owners submitted checks totaling $99,500 along with signatures representing 59.7% of the owners (the city is a property owner, bringing the number of signers to 200).

“I’m going to support this, but I think this is a highly flawed, imperfect process,” Councilman Steve Dicterow said. “I’m not happy with the percentages. This is not 60%, but from a policy perspective, we prefer to move forward on undergrounding projects.”

Placing utilities underground throughout Laguna Beach has been a topic of debate for decades. Residents are eager to move potentially hazardous poles underground, while city councils have been wary of giving residents interest-free loans to carry out the projects.

Once plans have been developed, the city will hold a public hearing at which residents can find out specific costs for the project. Until it comes up for a vote by district residents in about three years, there is no legal assurance that the neighborhood will follow through, City Atty. Philip Kohn said.

“At this point, there’s no commitment for the property owners to form the district,” Kohn said. “There’s still an opportunity for them to cast their votes or protests against the district once more information is known.”

If the project does not move forward, the owners’ payments would be refunded and the city would lose its $600,000 investment.

At least two districts have failed in the past five years, costing the city about $180,000, City Manager John Pietig said.

Despite their support for the Woods Cove project, council members remained wary of fronting the money without a guarantee that the city would get it back.

“My main concern is the $600,000,” Councilman Kelly Boyd said. “That just doesn’t come out of thin air. It comes out of our budget, so I hope all you people stick with this.

“We’re not looking at a short period. We’re all going to have grayer hair when this is done.”

Woods Cove resident Catherine Niemann told the council, “We’re all committed to this. You’re not going to lose your money. Somehow we’re going to make this happen. We’re asking you to invest in us.”

Assessments are based on the benefit each property receives. Property owners who gain enhanced views, safer conditions and improved aesthetics will pay higher assessments than those who get fewer improvements, according to the city.

Assessments for each property could run between $10,000 and $40,000, payable over 15 years, May said.

Owners who did not sign the petition but are in the district also must pay into the bond, May said.

Resident Craig Dusenberry cautioned that assessment estimates could skyrocket after the project is completed. “This is totally open-ended. I don’t feel like signing a blank check,” he said.

Those opposed to the assessment district questioned how the boundaries are set, arguing that the process favors those who want undergrounding.

“The proponents establish the boundary based on where they can find support,” May said. “We drew a boundary that would achieve the 60% that was based on what the proponents initially submitted to us.”