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Newport Beach staff explores city‑backed loan to ease underground‑utility assessment costs
Summary
City staff outlined a potential loan program to let eligible homeowners defer underground‑utility assessment payments for two proposed Newport Heights districts covering about 600 properties and estimated at $25–30 million. Council gave staff direction and a unanimous straw vote to return with draft program guidelines in early 2026.
City staff presented options Nov. 18 for a city‑supported loan program intended to help homeowners facing potentially large assessments to pay for undergrounding local utilities.
Finance Director Jason Alaman told the City Council the two proposed Newport Heights assessment districts would together include roughly 600 properties and carry an estimated construction cost of $25 million to $30 million — about $50,000 per home if the full estimate is assessed to property owners. Alaman said assessment districts are governed by the California Streets and Highways Code and Proposition 218, and that, under current state law, standard amortization does not provide an automatic deferral option for homeowners.
Alaman said comparable local programs exist in Manhattan Beach and Laguna Beach. Laguna Beach’s program, he said, generally requires applicants to be at least 55 years old (with limited waivers) and sets income and asset limits; only about 3% of homeowners qualified under Laguna Beach’s most recent intake. Alaman suggested the city could design a program with similar age, income and asset limits, a 20‑year initial term with five‑year renewal options, and a requirement that homeowners pay interest so they retain a financial stake. He estimated funding for a Newport Beach program could range from $500,000 to $750,000 if roughly 3% of property owners qualified.
Council members asked whether the structure should be citywide, how the program would handle property transfers or inheritances, and whether interest should be charged. Alaman recommended repayment on sale or transfer and noted the risk that county ownership records are not always timely updated; he also described the Laguna model of setting the loan interest rate about 1 percentage point above the bond financing rate.
Several council members and members of the public said a deferment option could improve the fairness and feasibility of assessment districts and make residents more likely to approve formation. The council gave staff a unanimous straw vote to continue developing a program and asked staff to return with draft program guidelines and a funding plan in February or March 2026.
Next steps: staff will prepare draft program guidelines and a funding plan for council review in early 2026; the assessment districts themselves still must complete petition and balloting processes before bond issuance and construction.
