Laguna Beach makes underground utility assessment deferment loan program more accessible
As utility undergrounding projects continue to be a leading topic in wildfire mitigation efforts in Laguna Beach, the city is prepared to make changes to its deferment loan program to provide relief for property owners who meet certain criteria.
Laguna Beach has had a deferment loan program for underground utility assessments since 2016, although city staff said no applications had been filed to participate in the program since its inception.
“I think this is going to be so helpful for passage of this in the [underground utility assessment] district and for people who really want to do it and can’t afford it,” Mayor Pro Tem Sue Kempf said.
Revisions backed by a unanimous vote of the City Council on Nov. 21 made access to the program less restrictive. The age limit to qualify for the loan deferment program dropped from 62 to 55.
Council members also raised the household income ceiling to 20% above the Orange County moderate income limit. The agenda item brought to the council had called for an increase in the household income threshold from the moderate income limit to 15% above it.
The income requirement will be based on data provided by the Department of Housing and Urban Development for the year in which a property owner applies.
City staffers noted that there are three underground utility assessments being formed that would affect approximately 580 parcels. A proposed assessment district for Woods Cove will come to a vote of impacted residents later this month.
Resident Tom Gibbs described the expansion of the loan deferment program as a proactive measure that eases financial hardship that might get some to vote against undergrounding projects.
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“It’s the most important safety measure that the city can do to protect us from a devastating wildfire that threatens property and people’s lives,” Gibbs said of undergrounding. “It’s not just where the undergrounding takes place because fire spreads. Undergrounding in one area benefits the whole city.
“In that connection, I think it’s incumbent on the City Council to do everything reasonable to facilitate undergrounding. This brings us to the Woods Cove program. The last hump to get over is the vote, and it would be a tragedy if it does not pass because some of the owners cannot afford the bond and hook-up payments.”
Recent public communications led city staffers to believe that demand had grown for the deferment loan program. The budget for the program has been expanded to $700,000. A $500,000 reduction in the current year’s transfer from the street lighting and utility fund to the wildfire mitigation and fire safety fund was reappropriated to add to the program’s budget.
“Several assumptions were built into that increase,” senior project manager Pierre Sawaya said. “We’re looking at 40 parcels that would qualify for the program, and that would be roughly 10% of the Woods Cove district, which is nearly 400 parcels. Assuming an average annual assessment of $3,500 per parcel would create a $140,000 a year obligation toward those assessments. These are assuming 6% bond rates and a 20-year bond term.
“Lasly, it is also including the private connection costs, which is assumed at $10,000 per property, so for 40 parcels, that would be a $400,000 one-time payment for those connections.”
The amendments discussed and approved by the council will be agendized on the consent calendar for a second reading at an upcoming meeting.
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