Laguna Beach holds public meeting on West Street undergrounding; council asks investment committee to vet bond option

The City of Laguna Beach held a public meeting July 29 on the proposed West Street Underground Utility Assessment District, where staff presented updated cost and financing information and took public comment from residents and neighborhood leaders.

Why it matters: The district would fund bringing overhead utilities underground to reduce wildfire risk and improve reliability. The council's decision on how to sell or carry the bonds will affect annual assessments paid by property owners and the amount the city must advance or administer.

What staff reported: Pierre Sawaya, capital program manager, said Southern California Edison’s latest bidding reduced the utility portion of the project by about $800,000 and that combined construction and financing adjustments have trimmed the district total roughly $1 million since the council’s May 20 action. Staff estimated bond proceeds needed at about $4–5 million and described three bond-purchase options: a public offering (25-year term), a private placement with banks (up to 20-year term), or a city purchase (25-year term). Public-offering sales carry higher upfront issuance costs but are the standard method for assessment districts. A city purchase could lower fixed issuance costs but raises legal and policy questions because it would put long-term, non-marketable debt on the city books.

Public reaction: About a dozen residents spoke. Some urged approval on safety grounds, recounting prior incidents and power-equipment ignitions. Others pressed whether the neighborhood petition and previous outreach had accurately described costs and asked why the city wouldn’t fund some sections directly. Several speakers recommended expanded deferment options for low-income or fixed-income homeowners and asked about timing and transparency in reassessments.

Council direction: Councilors did not make a final bond decision. Instead they asked staff to return with additional analysis and directed the city treasurer and the city investment committee to review the option of a city-held purchase, including (1) whether the city investment policy’s 5% limit on municipal-bond holdings applies or must be updated, (2) the practical liquidity and accounting consequences of carrying 25-year non-marketable bonds, and (3) apples-to-apples cost comparisons between a public offering and a city purchase. Staff said ballots for property owners will be mailed in the coming days and ballots will be opened at the district public hearing scheduled Sept. 23; construction is slated for spring 2026 if the balloting succeeds.

Next steps: Ballots will be mailed to property owners this week or next. The public hearing to open and tally ballots remains set for Sept. 23; bond sale and construction timing depend on that outcome and on the financing approach the council ultimately chooses.