DEL MAR — Del Mar leaders are celebrating a decrease in updated costs for the city’s utility undergrounding project, despite encountering numerous challenges during the second phase along Stratford Court.
The undergrounding program, which moves power lines throughout the city underground, is funded by the city’s one-cent sales tax Measure Q, approved by voters in 2016. These revenues have covered two of the eight planned undergrounding districts, including Tewa Court/10th Street, which was completed in 2023, and District 1A, covering Stratford Court South, expected to be completed in May.
The city has seen construction costs and San Diego Gas & Electric costs skyrocket in recent years, with the total estimated cost for the 1A project increasing from $5.4 million to more than $10 million as of last year, including around $3 million in SDG&E costs.
However, in updated estimates this month, SDG&E informed the city that their costs were around $2 million lower than expected, and confirmed lower forecasts for the upcoming District X1A/Crest Canyon project.
City Manager Ashley Jones said the updated estimate “felt like Christmas,” but that it’s too early for the city to expect similar reduced costs for all future undergrounding phases.
“This is great news, and I would love to be able to apply this holistically, but we want to better understand from SDG&E, what are some savings that are just specific to this district that wouldn’t be applied to all the future districts, and what are the savings that we can assume would apply?” Jones said.
Earlier budgets included costs for cable work that ultimately proved unnecessary, resulting in a decrease in SDG&E costs, according to Del Mar Principal Engineer Martin Boyd. However, future phases may require this work.
This and other adjustments reduce the total anticipated undergrounding cost across all phases from $105 million to approximately $93 million.
The District 1A project will replace 56 utility poles and 7,650 linear feet of overhead cables with underground lines along Stratford Court between 4th and 12th streets, impacting 227 properties and 464 residences.
Crews encountered several issues during the 1A project that impacted construction. This included the discovery of an abandoned utility line while trenching, confusion regarding permitting, vandalism, and a lack of specificity on city maps that led to “exploratory potholing.”
“The project has encountered numerous challenges and unforeseen field conditions throughout its progress,” said Boyd.
While this led to headaches, such as additional field task orders, some of which require weeks to approve, Boyd said the city took away several lessons learned for future phases.
Next phases, funding concerns
Despite the positive financial trajectory, Del Mar will still need outside financing for its upcoming phases. District X1A/Crest Canyon is planned to begin in early 2026, followed by District 1B/Stratford Court North.
The city is in the process of applying for debt financing via the California Infrastructure and Economic Development Bank (IBank) to cover at least X1A. As of February, X1A and 1B are estimated to cost around $23.3 million in total, with $17 million currently unfunded.
District X1A will underground around 12,250 linear feet of overhead power lines, affecting 152 properties and 114 residences. The current cost estimate for this phase is just under $17 million, including pre-construction, construction and utility costs.
The design for X1A is now complete, and the city anticipates being able to issue a construction bid by July. SDG&E costs for the project are expected to be between $3.3 million and $4.9 million, below the city’s initial estimate of $5.54 million.
Jones said a possible financing agreement would come before the city in the fall, around when they start reviewing bids for X1A. Del Mar leaders have agreed to pause design work on District 1B until they figure out how to finance the project.
At the request of council members, several residents submitted written comments on how the city should proceed with financing. With undergrounding becoming far more expensive than initially anticipated when Measure Q was adopted, some residents suggested that the city should pause the project and engage in a broader conversation with the community about revenue sources.
“Legally, you may have the authority to allocate these funds. But ethically — at $92 million and rising — don’t we owe it to the residents to formally check in?” wrote resident Tate Scott.
Most, however, urged the city to continue with the project on schedule, so that all neighborhoods can enjoy underground utilities.
“How is it fair that certain neighborhoods have already benefited from undergrounding through Measure Q, while others have not? All neighborhoods should be treated equitably when it comes to community-wide improvements — especially when public safety is involved,” wrote Colleen and Jeff Lambert, referencing the potential fire danger posed by above-ground lines.
