Council to pursue financing for utility undergrounding
After a lengthy Council discussion Feb. 3, council members directed staff and consultants to pursue a loan from the California Infrastructure and Economic Development Bank, or I-Bank, to finance up to $17 million for a period of 15-years to continue undergrounding overhead electrical lines.
I-Bank is a state government lender that finances public and private projects to promote economic development in California. Previously, the City borrowed from I-Bank for construction of the Del Mar Civic Center.
The final amount to be borrowed will be based on the results of construction bidding for the Crest Canyon Utility Undergrounding District and a future Council decision about whether to include construction costs for the Stratford Court North district.
Located in a high fire risk area, the Crest Canyon district is the next to be undergrounded based on the City’s approved Project Delivery Plan for the Undergrounding Program. Following Crest Canyon, utility poles and overhead lines in the Stratford Court North district would be next in line for removal.
Construction for Crest Canyon, which hinges on the availability of financing and the securing of easements and permits, is expected to begin in the fall of 2025 and last for 18 months. The total cost of this work is estimated to be $17 million.
Project costs for the Crest Canyon and Stratford Court North districts together are estimated to total $23.3 million.
On Feb. 3, the Council ordered a pause of design work to further analyze cashflows and better understand cost implications of including Stratford Court North as part of the initial borrowing.
Del Mar's Utility Undergrounding Program is funded primarily by Measure Q, a one-cent sales tax measure approved by City voters in 2016.
Faced with escalating costs, the council and its undergrounding and finance advisory committees have explored financing options that include “pay-as-you-go,” with no financing; a “hybrid” model, with initial borrowing then pay-go, and an accelerated “finance-as-you-go” model, with periodic and strategic financing when needed.
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