McKay, Ann Marie CC
From: Laguna Beach City Clerk
Subject: I support Recommendation 1 of Consent 17 City Council Agenda October 28 2025 From: johnthomas
Sent: Monday, October 27, 2025 2:06 PM
To: City Council < [email protected]>
Cc: Laguna Beach City Clerk <[email protected]>; McAvoy, Mark PW <[email protected]>; Kiff, Dave CM < [email protected]>; Sawaya, Pierre PW <[email protected]›; Parisi, Laura CT <[email protected]>; Curran, Gavin CM <[email protected]>; Subject: I support Recommendation 1 of Consent 17 City Council Agenda October 28 2025 I support Recommendation 1 of Item 17 "Approval Of Bond Purchase Method For Underground Utility Assessment District 2021-1 (West Street)" Recommendation: 1. "Approve the use of a public bond issuance as the financing method for Underground Utility Assessment District 2021-1 (West Street), based on the October 13, 2025, recommendation of the Financing Analysis Working Group;"
As a resident of South Laguna, I ,of course, am happy to see more of Laguna and especially South Laguna underground its utilities.
Very generous financial support of that district from residents not in that district helped the measure pass, and the West Street undergrounding district has now been approved by the residents in that district.
It is also appropriate that the city consider alternative financing options which it has done with the assistance of the Financing Analysis Working Group.
While, I understand why the city might consider a further subsidy in the form of a bond purchase at a below-market rate, the recommendation to use a public bond issuance is a far better alternative for a number of reasons.
Those reasons include:
• Purchase of the bond at a below-market rate could establish a precedent, and other districts could ask for the same subsidy.
• Considering the large number of potential future districts in Laguna, that could create an enormous financial burden on the city's future finances.
• Already, the city has exceeded its target 20% subsidy because the City Council approved a dollar amount of subsidy based on 20% of an earlier cost estimate. When a subsequent cost estimate lowered the projected cost substantially, the city never-the-less proceeded with the approved dollar amount of subsidy - not the percent subsidy. The result is that the actual subsidy of the West Street district is approximately 23% instead of the initial 20%. (Roughly an extra $200,000)
• The city is already offering a very generous deferral program where those electing to defer payments essentially borrow at a cost of 1% while the most recent city borrowing was at 4%. That means that the city is again subsidizing that district. And, recently, the city has eased requirements for qualification to use that deferral • While the City Treasurer and Meeder are limited to investing the city portfolio in instruments with terms no longer than 5 years, purchase of the entire West Street district bond would result in millions being invested for far longer than 5 years.
Finally, while the staff report states that the City Attorney has reviewed the authority to purchase at below market rates and concluded "that such a transaction would not constitute a gift of public funds, as the City is under no legal obligation to invest its reserves at a specific rate of return. Provided that the City Council determines the undergrounding project serves a public benefit, a discounted bond rate may be legally supported." While that is the opinion of the City Attorney, the point could be argued. 1 McKay, Ann Marie CC
Subject: West St underground District Finance
From: STANTON LEEMON
Sent: Monday, October 27, 2025 2:37 PM
To: City Council <[email protected]>
Subject: Re: Fwd: West St underground District Finance
This is from Dr. and Mrs Stanton Leemon
On Mon, Oct 27, 2025 at 2:35 PM, STANTON LEEMON
< wrote:
Begin forwarded message:
From: Sharon Lyons < [email protected]>
Date: October 27, 2025 at 2:06:39 PM PDT
To: [email protected]
Subject: West St underground District Finance
Dear City Council Members,
I am writing to respectfully ask that you select the financing option for the West Street underground project that includes a city contribution of approximately $545,558 to reduce the principal amount
This option benefits, both the city and the residence. The city would earn the same return on the bond, while residence with each receive a discount of a little bit more than $5000.
This gesture would go a long way and restoring trust and confidence between residence, city staff, and the council.
It would also provide much deed relief to residence facing financial hardships, while ensuring that every homeowner in the district benefits equally. Furthermore, taking the step with demonstrate good faith to other districts, observing the challenges our community has faced- encouraging future participation and smoother project collaboration.
By choosing this option, the city would also lower the total borrowing amount from a little over 5 million to somewhere around 4 million, which is both fiscally responsible and supportive of your constituents.
I urge you to take this opportunity to do the right thing for our community. Your consideration and leadership on this matter would be greatly appreciated by all of us who called this district our home.
Thank you for your time and commitment to serving our city.
Sharon Lyons
1