Vote on utilities sparks debate

Many Newport Beach residents see the advantage in taking utilities from above their homes and streets and hiding them below ground. It reduces fire dangers from power lines, wipes away unsightly poles and wires cascading through streets, and increases utility reliability — not to mention the potential benefit in property value.

Despite those benefits, there is one clear downside to the construction, according to Newport Beach resident Andrea Lucas.

“I have no idea how we are going to pay for it,” she said.

On July 22, the city tallied a vote to approve the underground utilities in assessment district 101 — an area east of Buena Vista, southeast of Edgewater Avenue, west of Adams Street and north of Balboa Boulevard.

The vote wasn’t close. Nearly 62% of residents who voted favored the project, which will cost residents more than $4 million.

The vote is based, in part, on the assessment of how much each property owner will pay for construction.

First, an independent assessment engineer is hired by the city to determine the particular costs to each property owner through a complicated formula based on benefits received from the construction. The costs of the assessor are advanced by the city and if the final vote does not approve the project, the city eats the initial design and study costs.

The assessment amounts tallied for each property are then used as votes. Each dollar assessed is counted as one vote, meaning a resident whose assessed cost was $15,000 got 15,000 votes for their one ballot. Some properties were assessed in the $30,000 range, others in the $4,000 range.

The total vote was $2,054,445.77 in favor and $1,260,755.08 against.

The city champions the process as democracy in action: A resident begins the process by proposal, a petition is then needed from 60% of residents for the potential construction to be studied, and a vote is needed before construction begins and the bill is passed to property owners.

“The city merely serves as the conduit to obtain financing and conducts balloting,” wrote Public Works Director Steve Badum in an e-mail. “It’s one of the purest forms of democracy — majority rules.”

But for Lucas, that just isn’t fair.

“I don’t know what to do,” Lucas said. “I can’t even pay my mortgage.”

Lucas and her husband recently opened a batting cage business in Fullerton and spent a chunk of their life savings on it. To be hit with this price for the utilities could be disastrous for them, she said.

If Lucas were to pay the bill immediately, her first payment would be due at the end of August at about $3,000 toward her total $16,000 price tag. If she can’t afford that — which she says she can’t — her other option is to have a lien put on her home and to pay the price over the next 15 years — with interest — which will be difficult for this mother of three.

“What are they going to do? Come take my house?” she said.

Lucas questions why the city isn’t more involved in paying for a project if it helps with safety.

Asst. City Manager Dave Kiff said the cost is hefty — in the $100-million range — when looking at it as a city project, and the safety improvement isn’t enough to make that investment.

Instead, the decision is left up to residents who, among the safety and aesthetic concerns, usually like the idea of a potential property value bump, Kiff said.

Residents in district 101 should be somewhat thankful prices aren’t steeper, according to city civil engineer Mike Sinacori. Sinacori said, for example, underground utility prices for Newport Beach’s Mariners Mile district — between West Coast Highway and Newport Boulevard — can run a property owner $30,000 to $40,000 to pay for construction, making district 101’s costs of about $15,000 for most residents look like a bargain.

“I know folks aren’t happy about it,” Sinacori said. “But when it is all said and done, they will be very happy with the project — if they can find a way to pay for it.”

Construction is set to begin in October, but it will be a couple years before the utilities are fully underground, Sinacori said.

DANIEL TEDFORD may be reached at (714) 966-4632 or at [email protected].