Overhead utility lines remain eyesore in SF, but city short on solutions

San Francisco's renewed focused on undergrounding the overhead utility lines along hundreds of city blocks is raising more questions than answers.

But if city officials don't come up with any answers it will take 600 years to underground the remaining 470 miles of wires.

Funding is the biggest obstacle to the remaining blocks, work that's estimated to cost in the millions. No one has figured out the exact cost; estimates put it at between $2.8 million and $5.9 million per mile.

While PG&E provides a portion of the cost to underground the wires, San Francisco used up its share and borrowed against future funding. It will take another 17 years just to pay that off.

A new report circulating City Hall takes a fresh look at the issue, which in recent weeks was heard by San Francisco's Capital Planning Committee and other government bodies. Most of the funding options detailed in the report seem unrealistic.

Cities like San Diego lobbied for a higher franchise fee to help pay for the undergrounding work and imposed a surcharge. That seems like a long shot for San Francisco.

“Unlike other cities, the San Francisco franchise agreement with PG&E dates back to 1939, and provides for a .5 percent fee and no renegotiation,” said the report, which was commissioned by the Local Agency Formation Commission, upon which members of the Board of Supervisors serve.

It took $115.9 million of the PG&E undergrounding funds to bury 520 miles of overhead wires, which cost The City a total of $173.2 million. That left 470 miles to go.

San Francisco often asks voters to approve bonds backed by property taxes to fund capital projects, such as for a hospital rebuild, housing or fire stations. While one option would be to ask voters to approve a bond for undergrounding the wires, it's unlikely since there is already a long list of capital needs for things like public safety.

Other financing possibilities include increasing the existing 7.5 percent utility users tax on cellphone and gas bills. It would take a two-thirds vote at the ballot for approval.

The 3.5 percent surcharge on San Diego's power users nets that city $50 million annually.

The report suggests another funding stream could come from increasing the tax on the sale of real estate.

Perhaps one of the report's most significant findings was the idea of coordinating the undergrounding with the building out of The City's fiber-optic lines to close the digital divide.

“One analysis of the undergrounding of fiber-optic cables projected that coordination with utility projects could yield a savings of 5-15 percent of project cost,” the report said.

To that end, the report also recommends that The City actually develop a master plan for the undergrounding work.

“All previous research has found cost-savings when work is done in coordination with other projects,” the report said.

That could help realize more novel approaches, such as helping businesses pay for undergrounding if they form what's known as community benefit districts, which allows business owners in a certain area to tax themselves for neighborhood improvement work.

Board of Supervisors President London Breed was supportive of undergrounding during the May 11 capital planning meeting, focusing on the area near Ninth Avenue and Irving Street.

“I've talked to some of the residents there. They want to see these utilities underground. It's one of the major gateways to Golden Gate Park and it just looks so horrible,” Breed said. “We need to be creative, especially about those areas that highlight The City.”

A finalized report is expected to be heard June 19 by LAFCO.

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