Councilmember, Bob Whalen, addressed the weekly gathering of Laguna Beach real estate professionals on February 28, 2018 to discuss the City’s strategy on undergrounding utilities throughout the City.
Mr. Whalen explained that power lines are a leading cause of California Wildfires and are responsible for burning the greatest number of acres in the state. He pointed to the shocking fires in Northern California earlier this year as an example of the devastation these fires can cause. Of course, many in the room vividly remembered the fires in Laguna Beach in 1993. Mr. Whalen helped “spark” our memories with images of that horrible event.
Other photos were shown of more recent fires in Laguna where utility poles were the cause of destruction, including on Laguna Canyon Road in 2007, on Ruby Street in 2012, in Canyon Acres in 2015 and a near-miss when a downed pole caused Laguna Canyon Road to be closed for 17 hours in October, 2017. By his count, there have been over 58 downed utility wires since 2007 caused by traffic accidents. Any of these could have been disastrous, if not for the diligence of first responders and assistance from surrounding communities.
An eye-popping map of Laguna Beach was shown identifying over 90% of the City to be in a “High fire hazard severity zone.” Clearly, public safety is the primary driver for the campaign to underground all utilities, but property protection, increased reliability, improved aesthetics, clearer views and easier access to fire insurance are also benefits.
The plan is to implement undergrounding in phases, likely to start in Laguna Canyon, address primary evacuation routes next, finally implementing a neighborhood solution. These are expensive undertakings with total estimates ranging between $285 million to $325 million. For that, one could purchase nearly ten Montage residences!
So, where would the money come from? Well, there’s no clear answer on that yet, and probably won’t be a single-funding solution for the entire City. Possible options include an increased sales tax of 1.0%, a General Obligation Bond paid by all property owners, a Community Facilities District Parcel Tax, which would be paid only by property owners in that particular district and an annual contribution of City funds of approximately $2.5 million per year for ten years ($25 million). Mr. Whalen pointed to many other California communities that have successfully used these methods to pay for their utility undergrounding projects.
It is important to note that any tax increase would be based on the assessed value of a home, not the market value. The City’s analysis shows that 68% of the parcels in the City are assessed at $1 million or less and that 81% of the parcels are assessed at less than $1.5 million. With the proposed tax, that means about 50% of homeowners would see an increase in their property taxes of just $66-$180 per year and another 30% of parcels would see an increase of $166-$450 per year.