STAFF REPORT
Meeting Date:
April 14, 2026
BUSINESS
17 SUBJECT: RESOLUTIONS AND APPROPRIATIONS RELATED TO SALE OF BONDS FOR UNDERGROUND UTILITY ASSESSMENT DISTRICT 2021-3 (FAIRVIEW/LA BREA)
RECOMMENDATION: It is recommended that the City Council:
1. Adopt the attached Resolution titled, “A RESOLUTION OF THE CITY OF LAGUNA BEACH,
CALIFORNIA, DETERMINING UNPAID ASSESSMENTS IN UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 2021-3 (FAIRVIEW/LA BREA) AND THE MANNER OF PAYMENT THEREOF AND LISTING BONDS ISSUED ON THE SECURITY THEREOF”;
2. Adopt the attached Resolution titled, “A RESOLUTION OF THE CITY OF LAGUNA BEACH,
CALIFORNIA, AUTHORIZING THE ISSUANCE OF CITY OF LAGUNA BEACH UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 2021-3 (FAIRVIEW/LA BREA)
LIMITED OBLIGATION IMPROVEMENT BONDS, AWARDING THE SALE OF SUCH
BONDS, APPROVING FISCAL AGENT AGREEMENT, OFFICIAL STATEMENT, BOND
PURCHASE AGREEMENT, AND CONTINUING DISCLOSURE CERTIFICATE AND
AUTHORIZING THE CITY MANAGER OR FINANCE DIRECTOR TO NEGOTIATE THE TERMS OF THE PURCHASE OF THE BONDS”;
3. Approve the purchase of Underground Utility Assessment District 2021-3 (Fairview/La Brea) public offering municipal serial bonds at a 25-year term with an estimated true interest cost of
5.01%;
4. Authorize the City Manager to award a task order to Accenture in the amount of $160,300 for construction management and inspection services, and authorize the City Manager to approve project-related expenses and change orders for additional construction inspection services that may be required in an amount not-to-exceed $20,000;
5. Appropriate $5,058,750 for construction and other related expenses within Underground Utility Assessment District 2021-3 (Fairview/La Brea), increase revenues by the same amount, and authorize the City Manager to expend all appropriated funds;
6. Authorize the City Manager to enter into necessary utility company agreements and make advance payments to the utility companies for their construction services for a total amount of $1,208,831; and
7. Determine that the action is exempt from California Environmental Quality Act pursuant to CEQA Guidelines sections 15301(b), 15302(c) & (d), and 15303(d).
SUMMARY OF THE MATTER
RESOLUTIONS AND APPROPRIATIONS RELATED TO SALE OF BONDS FOR UNDERGROUND UTILITY ASSESSMENT DISTRICT 2021-3 (FAIRVIEW/LA BREA) April 14, 2026
On January 13, 2026, the City Council approved the formation of Underground Utility Assessment District 2021-3 (Fairview/La Brea). To move forward with constructing the improvements, staff recommends the sale of bonds under provisions of the Improvement Bond Act of 1915 and other applicable laws and regulations. To issue bonds, the City Council must adopt the attached two resolutions, included as Attachment 1, and appropriate funding for construction and related expenses. The resolutions have been prepared and approved by the City’s Bond Counsel, Best Best & Krieger, LLP, in coordination with the City’s municipal advisor, Fieldman Rolapp & Associates, Inc., and the bond underwriter, Oppenheimer & Co. Inc. Construction improvements are scheduled to begin in June 2026, and it is recommended that a task order be issued to Accenture for construction management and inspection services to manage the construction phase of the project. Lastly, to protect project costs from future inflation, it is recommended that advance payments to the utility companies for construction services be authorized.
DISCUSSION
Bond Financing Method
A public bond issuance will be utilized as the financing method for this assessment district. This bond financing method has been successfully used by the City for the past several assessment district projects. The public offering will be marketed to external investors including full disclosure, underwriting, and investor outreach. A 25-year bond term resembles the recently completed bond sales for the Woods Cove AD 2014-2 and West Street AD 2021-1 projects. The public offering has an estimated “all in” interest rate of 5.58%, which includes all costs associated with the issuance of bonds and the bond discount.
The Fiscal Agent Agreement is included as Attachment 2, and establishes the terms and conditions under which the bonds will be issued, and the bonds and certain other funds and accounts held in connection with the bonds will be administered.
The Preliminary Official Statement (POS), included as Attachment 3, is the document that will be used by the underwriter to market the bonds to potential investors. The POS is to be released before the bond sale and provides information on bond terms and conditions. A memorandum prepared by disclosure counsel summarizing the duties and responsibilities of the City Council with respect to the POS is included as Attachment 4. The Bond Purchase Agreement (BPA), included as Attachment 5, contains the provisions relating to the purchase, sale, and delivery agreement of the bonds between the City and Oppenheimer & Co. Inc., the underwriter of the bonds. The forms of the Fiscal Agent Agreement, POS, Continuing Disclosure Certificate (attached as an appendix to the POS), and the BPA are referenced in the proposed resolutions. The Bond Details, which include the sources and uses of funds, are listed in Attachment 6.
Pursuant to the requirements of Section 5852.1 of the California Government Code, set forth below are good faith estimates as of March 16, 2026.
True Interest Cost 5.01%
Finance Charge $233,037
Proceeds $2,884,567
Total Payment Amount $5,903,750
RESOLUTIONS AND APPROPRIATIONS RELATED TO SALE OF BONDS FOR UNDERGROUND UTILITY ASSESSMENT DISTRICT 2021-3 (FAIRVIEW/LA BREA) April 14, 2026
The good faith estimate is included as Attachment 7.
RESOLUTIONS AND APPROPRIATIONS RELATED TO SALE OF BONDS FOR UNDERGROUND UTILITY ASSESSMENT DISTRICT 2021-3 (FAIRVIEW/LA BREA) April 14, 2026
Project Accounting
Bonds totaling $3,330,000 are proposed to be sold to Oppenheimer & Co. Inc. on April 23, 2026, with funding of bond proceeds on May 7, 2026, to finance a portion of the costs of construction of the utility undergrounding improvements within the Assessment District. Additional revenues were received through property owner prepayments and City contributions totaling $1,688,158. Originally, there were 90 assessed parcels with assessments totaling $4,302,201 in the Assessment District. Of those, 17 parcels chose to fully pre-pay their assessments, and two parcels chose to partially pre-pay their assessments, in the total amount of $738,998. The City also contributed $474,580 as a General Benefit and $474,580 as a separate City Contribution. In total, $5,058,750 in revenue will be received as summarized in the left column of Table 1 below. The estimated appropriations needed to complete the project are listed in the right column on Table 1.
Table 1 – Estimated Project Accounting
REVENUES APPROPRIATIONS
Bond Proceeds: $ 3,300,000 Construction: $ 4,355,370 (3) Premium: $ 40,592 Incidental Expenses
Prepayments: $ 738,998 Assessment Engineering: $ 44,055 General Benefit: $ 474,580 (1) Surveying: $ 5,000
City Contribution: $ 474,580 (2) Construction Inspection: $ 160,300 Construction Bidding: $ 8,000
Bond Issuance
City Administration: $ 35,000 (4)
Fiscal Agent: $ 3,000
Fiscal Agent’s Counsel: $ 6,000
Assessment District Admin. $ 10,000
Printing/Filing Fees: $ 2,500
Incidental Contingencies: $ 20,414 (5)
Disclosure Counsel: $ 37,500
Bond Counsel: $ 35,000
Financial Advisor: $ 39,500
Underwriter’s Discount: $ 44,123
Bond Reserve $ 199,800 (6)
Capitalized Interest $ 53,188 (7)
Approximate Total revenues: $ 5,058,750 Approximate Total appropriations: $ 5,058,750 Notes for Table 1
(1) “General Benefit” cost is a contribution by the City toward the project from the Wildfire Mitigation and Fire Safety Fund previously appropriated on January 13, 2026. (2) “City Contribution” cost is an additional contribution from the Wildfire Mitigation and Fire Safety Fund previously appropriated on January 13, 2026.
(3) “Construction” includes contractor costs, construction contingencies, and utility costs (SCE, Frontier,
RESOLUTIONS AND APPROPRIATIONS RELATED TO SALE OF BONDS FOR UNDERGROUND UTILITY ASSESSMENT DISTRICT 2021-3 (FAIRVIEW/LA BREA) April 14, 2026
Cox, and Crown Castle).
(4) “City Administration” is for the City’s estimated cost of administering construction. (5) “Incidental Contingencies” includes additional proceeds, CalMuni Reporting, and is adjusted to account for rounding of the Bond Proceed amount.
(6) “Bond Reserve” is 6% of the Bond Proceed amount.
(7) “Capitalized Interest” is the funded interest through September 2, 2026.
Utility Costs
Due to inflationary construction costs, staff requested utility companies to provide up-to-date costs to construct the project. The following costs were provided by the utilities and are included in the total construction appropriation listed in Table 1 above.
SCE Cost $420,239.20
Cox Cost $530,467.85
Frontier Cost $226,128.66
Crown Castle Cost $31,995.08
Total Utility Costs (Rounded): $1,208,831
Staff recommend payments be made to the utilities in advance of construction to lock in these current costs and enable the utility companies to procure materials and provide timely construction services when the City’s contractor begins work, presumably in June 2026.
Construction Inspection and Management
The Fairview/La Brea project requires full-time inspection and part-time construction management services to ensure public safety and adherence to the contract documents throughout construction. Staff solicited proposals from Psomas, Accenture, and HW Lochner, who are all on the City’s On-Call Consultant list. Accenture was determined to be the highest-rated firm due to its experience with utility undergrounding projects, and it provided a competitive cost for the scope of work.
It is recommended that a task order be awarded to Accenture (On-Call Consultant Contract No. 23-64) in the amount of $160,300 for the Fairview/La Brea project. Although Accenture is on the City’s approved On-Call Consultants list, the proposed fee exceeds the City Manager’s task order approval authority of $75,000; therefore, this task order requires City Council approval. In addition to the task order amount, it is recommended to authorize the City Manager to approve change orders for additional construction inspection/construction management services that may be required in an amount not-to-exceed $20,000 for the project.
Utility Underground Assessment Deferment Program
The Deferment Loan Program was revised and adopted by the City Council on July 8, 2025. Changes included authorizing the City Manager to provide discretionary approval for applicants of the program who do not meet the age requirements but otherwise meet all the requirements of the program such as income and asset requirements. One applicant applied for the program; however, following a review of the application and required financial documents, it was determined that the applicant did not meet the
RESOLUTIONS AND APPROPRIATIONS RELATED TO SALE OF BONDS FOR UNDERGROUND UTILITY ASSESSMENT DISTRICT 2021-3 (FAIRVIEW/LA BREA) April 14, 2026
eligibility requirements of the program. As a result, the Deferment Loan Program will not be utilized for this assessment district.
FINANCIAL ANALYSIS
An appropriation of $5,058,750 is recommended from the Bond Proceeds Fund after the sale of bonds is complete and increase revenues by the same amount as outlined in Table 1. An appropriation for the Deferment Loan Program is not required as no property owners qualified for the program.
ENVIRONMENTAL ANALYSIS
At the December 4, 2024 Planning Commission meeting, the City previously conducted environmental review for the proposed undergrounding project and determined that the project was exempt under the California Environmental Quality Act pursuant to CEQA Guidelines Section 15301(b), which authorizes an exemption for “existing facilities providing electric power with no expansion of use”; Sections 15302(c) and (d) for the “replacement or reconstruction of existing utility systems involving negligible or no expansion of capacity, and conversion of overhead electric utility distribution system facilities to underground”; and Section 15303(d) involving “new construction of small utility facilities or structures.” More detailed environmental analysis can be found in that December 4, 2024, Planning Commission approval.
ATTACHMENTS
1. Resolutions (Pgs. 6-21)
2. Fiscal Agent Agreement (Pgs. 22-70)
3. Preliminary Official Statement with form of Continuing Disclosure Certificate as App. D (Pgs. 71-151)
4. Disclosure Responsibility Memo (Pgs. 152-153)
5. Bond Purchase Agreement (Pgs. 154-177)
6. Bond Details (Pgs. 178-184)
7. Good Faith Estimate (Pg. 185)
Submitted By: Mark McAvoy Approved: .David A Kiff
Mark McAvoy, Director of Public
Works & Utilities
Dave Kiff, City Manager
Report Prepared By: Coordinated With:
Pierre Sawaya, Capital Program Manager Thomas Perez, City Engineer Michelle Bannigan, Director of Administrative
Services
Laura Parisi, City Treasurer