Del Mar council approves $25,000 for undergrounding consulting services

In an effort to explore undergrounding Del Mar’s utilities, the City Council on Feb. 16 approved a $25,000 expenditure from the general fund contingency for a consultant to estimate costs.

The community has long identified undergrounding utility poles as a top priority, but the last undergrounding project along a portion of Camino del Mar was completed almost four years ago.

At the request of council liaisons Deputy Mayor Terry Sinnott and Councilman Al Corti, the Finance Committee began researching a long-term project about a year ago.

Dan Quirk, chairman of the subcommittee working on the project, said he spoke with representatives from San Diego Gas & Electric, who explained that costs are based on the number of poles and linear feet. Quirk counted about 377 poles in the city and calculated approximately 53,000 linear feet.

At approximately $450 per linear foot, the subcommittee estimated it will cost about $25 million to underground all utility poles in Del Mar except for some along Via de la Valle and near the Del Mar Fairgrounds. Still, the subcommittee requested an independent estimate.

“This would be a large project, certainly, and we’d need the independent expertise of a consultant out there,” said Quirk, a five-year resident of Del Mar.

The city currently receives funding for undergrounding from a surcharge on electric bills, which Assistant City Manager Mark Delin said has been declining in recent years. Five years ago it was in the $80,000 range, he said, and now it is closer to $50,000.

Based on the Finance Committee’s research, city staff estimates a citywide undergrounding project could cost at least $30 million and up to $50 million.

“At $50,000 a year, it will take us 550 years to underground Del Mar utilities,” Delin said.

Del Mar considered a citywide undergrounding project about 15 years ago that had similar estimated costs, but utilities in some neighborhoods have gone underground since then.

That project, Quirk explained, never moved forward because residents did not want to increase property taxes. He added that the subcommittee has been researching other financing methods, such as a property transfer tax or a sales tax increase.

Del Mar keeps 1 percent of the current 8 percent sales tax, which Quirk said totals about $1.6 million. If the sales tax was increased to 9 percent, Del Mar would retain the raise, resulting in $3.2 million.

“That could very comfortably finance a $25 million bond at about 3 percent at the current borrowing cost,” said Quirk, noting that it could be a “popular” option with voters because sales tax in the city is primarily paid by visitors rather than residents.

“We’re not looking to gauge victors, but we do think this could be well received by the voting public,” he said.