Mark McDermott

Utility undergrounding underway again in Manhattan Beach

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by Mark McDermott 

The City Council on Tuesday night approved the hiring of an engineer to work specifically on utility undergrounding. The move, which was unanimously approved and comes at a cost of $168,000 annually, officially signals that the undergrounding process is about to get underway again in the city after nearly a decade hiatus. 

Two districts that passed the petitioning process in the early 2000s, District 12 and 14, which comprise the El Porto neighborhood of North Manhattan Beach, reemerged last year when the City Council lifted a moratorium enacted during the recession of 2009. Those districts have already gone out to bid and voting is scheduled to begin in August. Two other previously formed districts —  District 8, in the heart of downtown, and District 13, east of Highland and south of Rosecrans in North Manhattan — have asked to reform, while five new neighborhood districts have inquired with the city about formation. 

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“They are champing at the bit,” said Stephanie Katsouleas, the city’s public works director. 

Undergrounding, intended to enhance views by removing the visual clutter of power and phone lines, was a divisive issue within the community in the early and mid-2000s. The process entails neighborhood-based districts, called Underground Utility Assessment Districts (UUADs), approving self-assessment —  a one-time taxation, essentially — in both a per-parcel petition (which requires 60 percent approval) and Prop. 218 governed vote in which those homeowners with higher property values cast more weighted votes (meaning district approval requires 50 percent of its overall property value plus a dollar). Five districts were successfully formed and undergrounded in the first part of the 2000s. 

The controversy was that even homeowners in opposition have to pay their share of costs, also weighed by valuation, in districts in which the petition and vote favored undergrounding. In 2009, those costs ranged from $3,000 to $105,000, with a median assessment of around $30,000. Current costs will be determined by a new bidding process but will almost certainly be significantly more. 

Councilperson Suzanne Hadley wondered at the financial plight of homeowners who would be challenged by new assessments. 

“I do feel for those property owners,” she said. “How do we help them?” 

Katsouleas said that the city can offer a deferment program in which those with household incomes not exceeding $105,000 annually can avoid assessment. 

“There is a program for those in need —  they don’t ever have to pay the assessment while living in their home,” she said. “The city will pay the loan on their behalf, and when the property transfers, or sells, the balance becomes due at that time.” 

All other property owners will receive a notice shortly after a successful Prop. 218 vote and be required to pay cash within 30 days or spread the payments over 20 years, with interest, as part of their annual property tax bill. 

Mayor Nancy Hersman expressed concern over hiring a full time position despite the uncertainty over how much work voters will approve. The city recoups its costs only in districts that vote to underground, but still entails design and administrative costs in districts that ultimately do not form. 

“My concern is hiring somebody for seven years and then the work is done,” she said. “Undergrounding isn’t going to keep going forever. It’s not like water and storm drain projects.” 

Katsouleas said the position’s ending point would be tied with the end of undergrounding work, and that she worried less about not having work for the engineer than retaining the person. 

“It’s a very competitive market for engineers right now,” she said. 

Councilperson Richard Montgomery said that city was highly unlikely not to recoup its costs, and that the proactive measure of hiring an engineer would help signal to other neighborhoods that they could proceed with undergrounding. 

“Most people realize we are doing the right thing by moving forward,” Montgomery said. “And other [districts] will form.”

The council will conduct a public hearing on Districts 12 and 14 on Aug. 6.

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