There has been considerable interest among City of Newport Beach property owners about undergrounding existing overhead utility lines. Following are a number of frequently asked questions regarding undergrounding utilities and forming underground utility assessment districts. General Information
What is an underground utility assessment district?
An underground utility assessment district is a special district formed by a local government agency, such as the City of Newport Beach, at the request of local property owners for the purpose of undergrounding utilities in the public right-of-way. The district includes all property owners that will directly benefit from the undergrounding improvements. How is an underground utility assessment district formed?
Under Proposition 218, a majority of property owners that will benefit from the proposed improvements must vote in favor of forming the district. The process begins when property owners submit a letter of interest
to the City. After City staff and the utility companies perform some preliminary work, a bond counsel is retained and a petition
, which includes a cost estimate, is circulated among the local property owners. If at least 60 percent of the property owners express interest, the process continues and an Engineer’s Report is created. This report is important because it includes the assessment amount – the share of the improvement costs that each property owner would pay. A ballot is prepared and mailed to each property owner who then votes for or against forming the district. What is an assessment?
An assessment is a levy or charge against private property for improvements such as undergrounding utilities. What is involved in utility undergrounding?
All existing overhead utilities such as electric, cable television and telephone poles and wires are removed and the wires are placed in underground conduit. In the public right-of-way, this involves trenching, laying conduit lines in the trenches, installing new utility vaults, backfilling, repaving the street and removing the overhead poles and wires. Property owners are responsible for the "private conversion" portion of the project. What are the advantages and disadvantages of undergrounding?
The main advantages to utility undergrounding include improved aesthetics, system reliability and safety. Some proponents believe that undergrounding increases property values. The disadvantages include the cost and inconvenience caused by construction. What is Rule 20?
The California Public Utilities Commission's Rule 20 sets policies and procedures for converting overhead utilities (electric, telephone, cable television) and other equipment to underground facilities. Under Rule 20, undergrounding projects can be financed by utility rate money, combined rate funds and local tax proceeds, or private funds depending upon what section of the Rule is applicable.
- Rule 20A projects are paid for by the utility companies as directed by the Public Utilities Commission. In order to qualify for full funding, projects must provide a benefit to the general public and the utilities must be located within a civic, recreational, or scenic area or along an arterial or major collector road in a local government's general plan.
- Rule 20B allows property owners who do not quality for Rule 20A funds to form an underground utility assessment district.
- Rule 20C enables a property owner to privately fund the undergrounding of overhead facilitates if neither Rule 20A nor 20B applies.