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Council establishes Virginia Way undergrounding district, authorizes $855,000 in utility credits
Summary
Council approved formation of the Virginia Way Underground Utility Assessment District (Rule 20A/Rule 28 hybrid), authorizing use of the city’s SDG&E Rule 28 credit balance (~$855,000) to cover utility design and SDG&E construction costs and directing the city to fund civil/construction components through a future CIP.
Laguna Beach city council voted to establish the Virginia Way Underground Utility Assessment District (2025‑1), a targeted undergrounding project in South Laguna that will remove six poles and associated overhead wires between Third and Fifth avenues.
Staff described the proposal as a Rule 28–style project: SDG&E will use its accumulated Rule 28 credits to cover its portion of design and construction for utility relocation and will serve property connections at no cost to homeowners; the city would fund the civil construction—trenching, roadway restoration and private service laterals—through a future capital project. The staff report said the city currently holds approximately $857,000 in SDG&E Rule 28 credits; SDG&E’s budget estimate for the utility portion is roughly $855,000 and staff recommended authorizing use of those credits to start design and SDG&E work immediately.
Council approved the engineers’ report, adopted the resolution establishing the district and authorized use of the available Rule 28 credits. Staff gave a preliminary schedule that projects design and permitting through mid‑2026 with construction in 2027; civil construction costs were preliminarily estimated at about $1.28 million and will require future CIP appropriation.
A number of residents earlier in public comment urged staff to broaden the district northward so the project would not leave a short above‑ground stub of poles; councilors and staff said they would discuss the geography and the possibility of adding adjacent blocks with SDG&E and include the question in the ad hoc work on assessment districts.
Why it matters: The action launches design and utility work for a short but strategic segment identified as an evacuation route; it formalizes use of SDG&E Rule 28 credits and commits the city to funding the civil construction component in a future CIP.
What’s next: Staff will finalize design with SDG&E and return with required budget requests for civil construction; the city will coordinate easement work and property connections. The staff report estimated completion around August 2027 if timelines hold.
Quote “Staff recommends using our existing Rule 28 credit balance to get the utility design and relocation started while the city programs civil construction in a future CIP,” Capital Programs Manager Pierre Sawaya said.
