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Newport Beach staff to draft loan program to help homeowners with Newport Heights undergrounding assessments
Summary
City staff outlined a possible city-backed loan to let eligible homeowners defer underground utility assessment payments for two proposed Newport Heights assessment districts covering about 600 properties (estimated $25–30 million); council gave staff direction to return with draft program guidelines in early 2026.
Mayor Joe Stapleton convened a study session Nov. 18 to examine options for helping homeowners who may face financial hardship paying underground utility assessments proposed for the Newport Heights area. Jason Allen, the city’s finance director, told the council the two proposed assessment districts would cover roughly 600 properties with an estimated project cost of $25 million to $30 million — about $50,000 per home — and that state law’s standard amortization structure lacks a built-in deferral option.
Allen said staff would study a city-supported loan or deferment program modeled on Laguna Beach and Manhattan Beach, under which the city would issue loans secured by liens that defer the property owner’s annual assessment payment; the obligation would remain and be repaid at sale, property transfer or a set maturity date. He described likely eligibility criteria based on age, income and asset limits, and noted Laguna Beach initially required applicants to be 55 or older but allowed waivers tied to income and assets.
Council members raised implementation questions about funding, eligibility and program limits. Council Member Michelle Barto asked whether a program could be made available citywide rather than only to Newport Heights; Allen said an initial allocation could be structured to apply to future assessment districts. Councilman Wagon asked how the program would treat property transfers and heirs; Allen recommended a 20-year sunset with five-year renewal options to limit risk from unrecorded transfers. Allen also proposed homeowners pay interest — the Laguna model used an interest rate 1 percentage point higher than the bond rate — so borrowers maintain a financial stake in the program.
Members of the public asked clarifying questions about cost-sharing for utilities and whether overhead costs (power, fiber) were city functions. Adam Leverenz asked whether participation would be voluntary and whether the city operates power or fiber utilities; Allen said the assessment covers construction costs for undergrounding and that utilities’ responsibilities vary by provider.
After public comment and council discussion about structure, eligibility and fiscal risk, the council signaled support and took a straw vote directing staff to develop draft program guidelines and return to council in February or March 2026 for review. Allen told the council the Newport Heights districts are still several years from construction and bond issuance (about three to four years), so a draft program could help property owners decide how to vote on district formation.
The study session concluded with staff charged to prepare a detailed program framework that would balance fairness and participation against the city’s fiscal exposure.
