TO:
Honorable Mayor and Members of the City Council
THROUGH:
Talyn Mirzakhanian, City Manager
FROM:
Ted Semaan, Interim Public Works Director
Gilbert Gamboa, Acting City Engineer
Justin Murray, Engineering Technician II
SUBJECT:Title
Consideration of an Update for Underground Utility Assessment Districts 19-12 and 19-14 (No Budget Impact) (Interim Public Works Director Semaan).
(Estimated Time: 45 Mins.)
RECEIVE AND FILE
Body
_________________________________________________________
RECOMMENDATION:
Staff recommends that the City Council receive and file the update on Underground Utility Assessment Districts 19-12 and 19-14 (Districts 12 and 14).
FISCAL IMPLICATIONS:
On November 5, 2019, the City Council approved the sale of bonds to finance unpaid property assessments in amounts not to exceed $6,735,000 and $6,810,000 for Districts 12 and 14, respectively. Prior to bond issuance, the City expended $238,193 for District 12 and $268,028 for District 14 for utility design and assessment-engineering services, and both were fully reimbursed. Proposition 218 Engineer’s Reports confirmed total assessments of approximately $6.7 million in District 19-12 and $6.8 million in District 19-14, with average parcel assessments of $29,500 and $27,900, respectively.
BACKGROUND:
Underground Utility Assessment Districts (UUAD) 19-12 and 19-14 in Manhattan Beach represent the culmination of more than a decade of community interest, planning, and financing approvals to move overhead utilities underground.
The process began in 2005, when property owners within the proposed districts submitted petitions with more than 60% support, initiating the undergrounding effort. Initial funding for Southern California Edison (SCE) design work was approved in 2006, with Frontier and Charter design funds approved in 2008. However, the 2008 economic recession led the City Council to suspend all UUAD activity in 2010. The program was revived in 2017, and the utility companies resumed completing design plans. By 2018, the City retained NV5 to serve as Assessment Engineer, tasked with preparing reports and developing the cost allocation formula for each district.
In August 2019, the City Council approved Preliminary Engineer’s Reports and set public hearings for both districts. The total estimated costs were $6.7 million for District 19-12 and $6.8 million for District 19-14, covering design, construction, contingencies, incidental expenses, and bond costs. NV5’s allocation method divided costs among three categories of special benefit: aesthetics, safety, and reliability. Safety and reliability were assessed equally to all parcels, while aesthetic benefits were distributed based on lot size. Average assessments were projected at $29,500 per parcel in District 19-12 and $27,900 per parcel in District 19-14.
A Proposition 218 vote was held in October 2019. Property owners received ballots weighted by their financial obligation, and both districts secured majority approval. The Council then confirmed the Final Engineer’s Reports and authorized formation of the districts. Owners were offered two options: pay their assessments in full during a 30-day cash collection window or finance their share through 20-year limited obligation bonds. Paying in cash allowed owners to avoid roughly nine percent in bond-related costs.
In November 2019, the Council formally authorized the sale of bonds to finance unpaid assessments. U.S. Bank was appointed trustee, while Bank of America Securities served as the underwriter. Bonds not exceeding $6.735 million for District 19-12 and $6.810 million for District 19-14 were approved, with marketing scheduled for late November and closing in December 2019.
By June 2020, the districts had advanced to the construction stage. The City Council approved multiple agreements, including contracts with Hot Line Construction for Frontier facilities work, NV5 for inspection services, and Southern California Edison and Frontier for utility relocation and cabling. Additional tri-party agreements ensured compliance with prevailing wage laws in Charter’s construction arrangements. At this stage, the combined project investment exceeded $12 million across both districts.
Districts 12 and 14 are being completed in four coordinated phases. First, right-of-way construction, followed by cabling and equipment installation phase, the third phase, where property owners are converting their homes to the underground system through private contractors, and the final phase of Southern California Edison cut-overs. The status of these phases is discussed below.
DISCUSSION:
Overview
The first phase involved right-of-way (ROW) construction, during which crews trenched public streets and installed underground vaults, vent pipes, pull-boxes, and conduits leading to the edge of private properties. This work was completed by November of 2021.
The second phase, cabling and equipment installation, required the utility companies to pull new power lines through the conduits, energize transformers, and activate the underground system. This too has been completed, and Southern California Edison has confirmed that the new underground grid is live in both districts.
As of the latest update, the project is in its closing stage of phase three, the underground infrastructure has been energized, and most of the remaining work depends on property owners completing their private connections. Property owners are responsible for hiring private contractors to connect their homes to the underground system. A small number of properties have not yet begun their conversion process, while others await final inspection or phone and cable adjustments. The last major milestone will be the full removal of overhead wires, wooden utility poles, and the installation of new concrete pole-mounted streetlights, marking the complete transition to underground utilities for Districts 12 and 14.
Once a property passes the City’s Electrical Release inspection, Edison coordinates the final cut-over to switch the home from overhead service to the new underground supply. Progress is steady but ongoing-by September 2025, a total of 220 properties across the two districts had already been converted to underground by all utilities, with dozens more moving through inspection and conversion queues.
Private Property Service Conversions
Below is a summary of conversions, out of 471 total properties, 227 in District 12 and 244 in District 14:
• Converted: 219 properties (90 in District 12, 121 in District 14)
• Released (awaiting SCE cut-over): 72 properties
• Not Released (still pending City inspection): 109 properties
• No Work Started at 7 properties:
§ 3 properties - no permit
§ 3 properties - permit issued, no Inspections
§ 1 property - existing conduits, no permit required - to be removed
• City to Convert (per owner’s request): 5 properties (City-led work planned in the near future)
• Need Phone/Cable Conversions Only: 8 properties
• Phone/Cable Conduits for future use are installed: 40 properties
• Stubbed for New Construction: 10 Properties (prepared but not yet ready for conversion)
Edison
Southern California Edison (SCE) has confirmed that the underground electrical system for Districts 19-12 and 19-14 is energized and fully capable of serving all parcels. As of September 2025, 268 properties have been converted to underground electrical service, 80 properties have passed City inspection and are awaiting SCE cutover, 110 properties remain in “not released” status, and 22 properties fall under special categories such as “City to Convert,” “No Work Started,” or “Stubbed for New Construction.” SCE continues to coordinate with the City on the sequencing of inspection releases and cutovers. Staff is maintaining biweekly meetings with SCE to ensure that conversions are completed promptly once properties are ready, and that pole removal sequencing can begin immediately after conversions on a given block are finalized.
Frontier and Spectrum
Telecommunication providers Frontier and Spectrum remain critical to achieving completion. Frontier currently has 26 locations with conduit issues preventing conversion. Sixteen of these are private property deficiencies and eight are within the public right-of-way (ROW). Staff is evaluating the potential assignment of certain ROW deficiencies to the City’s contractor (Asplundh) to expedite resolution.
Spectrum has completed all splicing and activations across both districts, and approximately 20 percent of homes are fully converted to underground service. Remaining aerial drops are scheduled for conversion in coordination with property owners. Staff continues to communicate with both providers to ensure their remaining work is addressed in parallel with property conversions to avoid delays in pole removal.
Project Schedule
Staff has analyzed current conversion trends to project completion timelines for private property connections. As of September 2025, 251 properties remain to be fully converted. Recent progress has accelerated from approximately 10 conversions in August to an anticipated 20 to 30 conversions in September. At a pace of 20 conversions per month, completion would extend to approximately 12.5 months. At 30 conversions per month, completion could be achieved in 8.5 months. If the rate increases further to 35 to 40 conversions per month, staff projects completion within six to seven months.
Based on current coordination efforts and contractor capacity, staff projects an achievable average of 30 to 35 conversions per month, which would result in full private conversion completion within seven to eight months.
Following private conversions, overhead pole removal and streetlight installation are expected to extend the overall project timeline by an additional nine months. Based on this sequencing, staff projects overall completion of the districts, including pole removal and streetlight energization, within approximately 15 to 16 months.
Right-of-Way Issues
Although the Notice of Completion for Hot Line Construction’s right-of-way (ROW) work was filed in December 2023, subsequent inspections have identified multiple deficiencies that continue to impact property conversions. Specifically, four properties were unable to connect conduits at the property line due to incomplete work, and three properties require conduit stub-outs to be relocated to the opposite side of the building because of design deficiencies or unforeseen field conditions. These issues have prevented certain properties from completing their conversions and remain an obstacle to project closeout. Staff is reviewing these deficiencies for reassignment to the City’s contractor, Asplundh Construction, under a change order to their existing contract. The intent is to complete ROW remediation in parallel with private property conversions so that the schedule for overall project completion is not extended.
Miscellaneous Issues
Several additional coordination items require resolution. Staff is working with utilities to confirm whether service to the Chevron gas station facility on 45th Street is already underground and to ensure no conflicts remain.
For the Los Angeles County Beaches and Harbors Maintenance Building, the underground service installation has been completed. Staff is coordinating the final cutover with the County. Frontier advised that a County work order will be required to reroute the low-voltage conduit currently draped over the roof so that it can be placed under the overhang and out of sight. This work order remains pending, and staff is coordinating with the County to move the item forward in alignment with the overall project schedule.
City Conversions
Five properties within the districts have indicated that they will not be completing their service conversions independently, requiring the City to hire a contractor to perform the work on their behalf. Property owners will be invoiced accordingly. Staff has notified the homeowners of the City’s intent to complete the conversions and is in the process of securing Right-of-Entry agreements in accordance with the Manhattan Beach Municipal Code.
On September 23, 2025, City staff met with Asplundh and SCE to align on expectations for these conversions, including inspection protocols and approval requirements, to ensure the work proceeds smoothly once initiated. Construction is anticipated to begin in late 2025 following finalization of Asplundh’s revised pricing and scope, with associated costs to be recovered through property liens.
Asplundh Contract
The City awarded a $105,300 contract, along with an additional $26,325 contingency, to Asplundh Construction in October 2023 to complete the five City-led conversions. The current scope also includes installation of a meter pedestal at 4200 The Strand and removal of an underground obstruction at 4414 Ocean Drive. Staff is evaluating potential additions to Asplundh’s scope, including addressing conduit repairs identified by Frontier, conversion of “no work started” properties, and remediation of right-of-way deficiencies left from Hot Line.
Expanding Asplundh’s scope will allow the City to address multiple outstanding issues under one contract, streamlining oversight and ensuring these items are completed in step with private property conversions.
Private Contractors
The majority of conversions continue to be performed by private contractors hired by property owners. Approximately 90 percent of all work is being managed by five primary firms: Bear Electric (approximately 160 properties), Carlson & Sons (60), Balboa Electric (40), I.V. Electric (20), and Michael B. Davis (20). All other conversions, totaling approximately 20 properties, are being performed by smaller firms.
Staff conducts weekly field walks with these contractors to identify issues in real time, coordinate City inspections, and prepare for SCE releases. This direct oversight has reduced re-inspection delays and is expected to help maintain the pace of conversions going forward.
Current Efforts
To support the current phase of the undergrounding project, staff has implemented several proactive measures to accelerate completion and provide transparency to property owners. Regular coordination meetings have been established with utility providers and electrical contractors to streamline communication and resolve field issues promptly.
Staff conducts on-site inspections with the primary private contractor on a weekly basis or more frequently as needed to verify cut-over readiness, minimizing the need for repeat inspections. In collaboration with the City’s Building & Safety Department, staff is facilitating the extension or payment of fees for expired or soon-to-expire permits, enabling private property owners to obtain final inspection and clearance for their underground electrical service.
A web-based interactive property status map is maintained to provide residents with real-time updates. Additionally, staff is actively coordinating with Asplundh-contracted to complete conversions for five properties-and is working directly with the respective property owners to initiate their transitions. This includes securing right-of-entry agreements and confirming that the owners have not independently contracted with another provider to complete their conversions.
Staff continues to advocate on behalf of property owners by addressing concerns directly, facilitating conversions, and coordinating with contractors and utility companies.
Pole Removal and Streetlights
A total of 34 poles within the two districts are slated to be removed and replaced as part of the final phase of the project. Southern California Edison (SCE) will coordinate this process sequentially, requiring that all parcels served by a given pole are converted and inspected before removal can occur. In addition, SCE requires third-party utilities, including Spectrum and Frontier, to detach their facilities in advance of extraction.
Poles with existing lights will be replaced with new underground serviced concrete pole-mounted streetlights, approximately 25 feet in height, generally installed within one to seven feet of their current locations. Foundation installation, curing, and fixture energization must occur before SCE can complete pole removal. This sequencing, together with streetlight installation, is expected to extend the overall timeline by approximately nine months beyond the completion of private conversions.
PUBLIC OUTREACH:
Since the formation of Underground Utility Assessment Districts 19-12 and 19-14, staff has conducted extensive public outreach to inform and assist affected property owners throughout each phase of the project. Outreach began during the 2017-2019 formation period and included mailed notices, public hearings, and informational meetings held in accordance with Proposition 218. Property owners received ballots, Engineer’s Reports, and payment notices to ensure transparency during the assessment and bond issuance process.
Following bond approval and the start of construction, staff continued regular communication through direct mailings, field coordination, and email correspondence to keep residents informed of project milestones and required actions for private conversions. Notices were distributed at each major phase, including the September 2022 Notice of Deadline, November 2022 Notice of Non-Compliance, April 2023 Notice to Provide Underground Utilities, and June 2023 Final Notice, all emphasizing completion deadlines and next steps for property owners.
Subsequent project update letters (February 2024, October 2024, and April 2025) provided progress summaries and clarified outstanding items as construction advanced. In July 2025, staff issued a concise postcard mailer designed to deliver only the most relevant, property-specific information to assist homeowners with remaining conversions and inspections.
To further enhance transparency, the City maintains an Interactive Property Status Map on the Undergrounding Program webpage <https://www.manhattanbeach.gov/departments/public-works/engineering-division/utility-undergrounding>, allowing property owners to track progress in real time. Staff also remains readily available by phone, email, and in the field to provide individualized assistance, resolve coordination issues, and ensure residents remain informed as the districts move toward completion.
Notices for the October 21, 2025 City Council meeting were mailed out to 1,108 addresses (property owners and occupants in the impacted area).
ENVIRONMENTAL REVIEW:
The City reviewed the proposed activities for compliance with the California Environmental Quality Act (CEQA) and determined that undergrounding overhead utility systems qualify for a Categorical Exemption pursuant to Sections 15302(d) and 15303(d) (Conversion of overhead electric utility distribution system facilities to underground, and conversion of existing small structures to small new
equipment and facilities in small structures.) Thus, no further environmental review is necessary.
LEGAL REVIEW:
The City Attorney has reviewed this report and determined that no additional legal analysis is necessary.
ATTACHMENTS:
1. Location Map
2. PowerPoint Presentation